Trump asked Congress to as soon as possible pass a bill restricting foreign investments. The bill will expand the rights of the Committee on Foreign Investments, allowing it to influence investments in certain sectors.
Trump urged the Congress to support a bill that is designed to protect the United States from the risks that foreign investment brings to national security, Reuters reports. Rather, Trump says, this law meets US interests and will have a beneficial effect on the investment climate in the country.
The bill, known as the Foreign Investment Risk Analysis Act (FIRRMA), is designed to update the 1975 law that gives the US Foreign Investment Committee the right to recommend to the US president to block foreign investments if they can damage the national security of the country.
The document provides for expansion of the Committee’s powers, in particular, granting it the right to consider not separate acquisitions of American companies by foreign investors, as it was before, but to analyze from these positions entire industries and influence the sale of minority stakes to foreign companies.
The document is considered by its developers as a mechanism that will allow to limit Chinese investments, which through the acquisition of American companies gets access to their technologies. However, officials commenting on the potential application of the new law indicated that it was not targeted against any specific country.
“This is not intended to target China,” Treasury Secretary Steven Mnuchin told reporters on Wednesday. “It’s fair to say that certain countries will get a heightened review; I don’t think we need a list of special countries.”
The WSJ notes that the bill enjoys broad bipartisan support in Congress.
Trump’s statement suggests that he opted to take a softer approach than originally considered by the White House, the WSJ and The Washington Post observed.
Trump’s administration also considered an option giving the president the right to impose harsher restrictions on foreign investment in US technology companies (maximum 25%) and on the export of high-tech products to China.
After WSJ reports that the president can choose a “hard” option of restrictions, stock in a number of technology companies fell in the US.