WASHINGTON (Reuters) - U.S. President Donald Trump said on Wednesday he will use a strengthened national security review panel process to deal with potential threats from Chinese acquisition of American technologies, instead of imposing China-specific restrictions.
The Treasury Department has recommended that Trump use the Committee on Foreign Investment in the United States (CFIUS), whose authority would be enhanced by new legislation in Congress, to control transactions. The legislation expands the scope of deals reviewed by the interagency panel to address security concerns, Trump said.
The decision marks a somewhat softer approach to curbing Chinese investments pushed by Treasury Secretary Steven Mnuchin, while other senior Trump advisers had argued for harsher, China-specific curbs invoking an emergency economic powers.
The investment restrictions are part of the administration’s efforts to pressure Beijing into making major changes to its trade, technology transfer and industrial subsidy policies after U.S. complaints that China has unfairly acquired American intellectual property through joint venture requirements, unfair licensing and strategic acquisitions of U.S. tech firms.
“I have concluded that such (CFIUS) legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity,” Trump said in a statement that did not specifically name China.
U.S. stocks traded higher on Wednesday morning after Trump announced the new approach to U.S. investment restrictions.
Trump added that upon final passage of the legislation, the Foreign Investment Risk Review Modernization Act, he will direct his administration “to implement it promptly and enforce it rigorously, with a view toward addressing the concerns regarding state-directed investment in critical technologies.”
