Trump backs off restricting China investment
WASHINGTON — President Donald Trump is shifting away from a previously announced plan to impose limits on Chinese investment in American technology companies and high-tech exports to China. Instead, the president is calling on Congress to enhance an existing review process.
Senior administration officials disclosed the plans Wednesday. They said they have been working with Congress to pass a bill that will provide "enhancements" to the foreign investment reviews under the Committee on Foreign Investment in the United States.
Mr. Trump said in a statement Wednesday that "such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity. "
Treasury Secretary Steven Mnuchin on Wednesday said the strengthened legislation will allow the U.S. to prohibit American companies pursuing joint ventures in China from transferring technology if that tech is deemed "critical" to national security.
"One of the problems of CFIUS before was we could block an acquisition, but then a company could go form a joint venture and we couldn't block that," Mnuchin said in an interview with CNBC. "If someone sets up a joint venture on critical technologies that would have been blocked, they will also be prohibited from transferring that technology through a joint venture."
Mr. Trump on Tuesday pushed back on recent reports that the U.S. was preparing the investment restrictions, by saying the U.S. would use the 1988 law that set up the Committee on Foreign Investment in the U.S. (or CFIUS) to protect U.S. interests when foreign companies seek to buy or invest in U.S. companies. Speaking to reporters at the White House, the president said "we have the greatest technology in the world, people come and steal it. We have to protect that, and that can be done through CFIUS."
He added that media reports saying he was planning two further initiatives, in addition to CFIUS, to prevent Beijing from taking U.S. technology were merely "a bad leak...probably just made up."