US President Donald Trump signed a new America First Investment Policy last Saturday. The memorandum focused heavily on China’s involvement in critical sectors and widened the scope of national security bodies to more closely review greenfield investments.
“Economic is national security,” the document read.
The main takeaway is that the US Government will double down on investment restriction policies to and from China, especially in high-tech sectors, which had ramped up during the Biden administration. The emergence of Chinese AI company DeepSeek and allegations that it used Nvidia chips through purchases in Singapore raised questions about the effectiveness of these policies.
Hard stance on Chinese investment
“Restrictions on foreign investors’ access to United States assets will ease in proportion to their verifiable distance and independence from the predatory investment and technology-acquisition practices of the PRC [People’s Republic of China] and other foreign adversaries or threat actors,” the memorandum outlined, suggesting a harder stance on trade barrier hopping.
It will expand the authority of the Committee on Foreign Investment in the US (CFIUS), allowing it to restrict Chinese investments in US “technology, critical infrastructure, healthcare, agriculture, energy, raw materials and other strategic sectors”. It will also be given more power to restrict greenfield investments, access to the US workforce in sensitive technologies like AI and expand “the [CFIUS’] remit of ’emerging and foundational’ technologies”.
The new administration will also consider expanding outbound investment restrictions to China “in sectors such as semiconductors, AI, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated by the PRC’s national Military-Civil Fusion strategy”.
It will reconsider whether to terminate the 1984 US-PRC Income Tax Convention, which aimed to avoid double taxation and tax evasion. The memorandum highlights this treaty and China’s acceptance into the World Trade Organization (WTO) as the main reasons leading to “the deindustrialisation of the US and the technological modernisation of the PRC military”.
Within its definition of adversary nations, it includes Cuba, the Hong Kong Special Administrative Region, Iran, the Macau Special Administrative Region, Russia and Venezuela.
Looser laws for allies
In turn, it says the US will strengthen efforts to facilitate investments from allies through decreasing bureaucratic processes. It mentioned some allies that have “tremendous sovereign wealth funds”, which could be alluding to major funds in the Middle East, where Trump has had a close relationship with Saudi Arabia.
This includes the creation of a ‘fast-track’ process for investments from allies and friendly partners in “advanced technology and other important areas”.
Environmental reviews for investments of more than $1bn in the US will also be expedited.
The America First Investment Policy affirms the US’ commitment to an open investment environment within the country.
