America First Investment Policy: Targeting Chinese Investment with CFIUS

February 21, the President announced an "America First Investment Policy," aimed at promoting foreign investment from allies while restricting investments from adversarial nations, notably the People's Republic of China (PRC).

"Welcoming foreign investment and strengthening the United States’ world-leading private and public capital markets will be a key part of America’s Golden Age," the memorandum states. "Investment by United States allies and partners can create hundreds of thousands of jobs and significant wealth for the United States."

However, the directive explicitly targets investment threats posed by certain adversaries. "The PRC systematically directs investment in United States companies and assets to obtain cutting-edge technologies, intellectual property, and leverage in strategic industries," it asserts. The memorandum highlights the PRC’s use of "Military-Civil Fusion strategy," describing efforts to exploit U.S. capital markets to enhance its military capabilities.

Fast Track for Allies

To address these threats, the President outlined specific policy initiatives, including the establishment of an expedited "fast-track" process facilitating investment from allied nations into sensitive U.S. sectors such as artificial intelligence and critical infrastructure. This process will involve "objective standards" and security provisions to ensure protection against foreign adversaries.

CFIUS Targets

The administration will strengthen regulations via the Committee on Foreign Investment in the United States (CFIUS), targeting investments by PRC-affiliated entities in strategic areas including technology, healthcare, agriculture, and energy. The memorandum also instructs an expedited environmental review for investments exceeding $1 billion and seeks to eliminate bureaucratic "mitigation agreements" that create perpetual compliance burdens.

Further restrictions will apply to U.S. investments in sectors linked to the PRC’s military-industrial activities. "It is past time for American universities to stop supporting foreign adversaries with their investment decisions," the memorandum notes, announcing a review of current investment restrictions and potential new measures, including terminating the U.S.-PRC Income Tax Convention.

Additionally, the administration intends to uphold rigorous financial auditing standards and fiduciary responsibilities, specifically targeting PRC-affiliated companies listed on U.S. exchanges.

[Memorandum]