• President Donald Trump signed a memorandum to limit Chinese investments in critical American sectors. The move aims to protect national interests and prevent foreign adversaries from obtaining strategic technologies and assets. Trump said investment by other countries can benefit the U.S. However, he also said “investment at all costs is not always in the national interest.”

• The memorandum instructs U.S. officials to restrict foreign investments in technology, critical infrastructure, healthcare, agriculture, energy, and other strategic sectors, with eased restrictions based on investor verification.
• The administration will use sanctions under the International Emergency Economic Powers Act to deter American investment in the Chinese military-industrial sector and will review the 1984 U.S.-China Income Tax Convention.

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President Donald Trump signed a memorandum on Friday, Feb. 21, limiting Chinese investments into critical American assets. Trump said investment by other countries can benefit the U.S. However, he also said “investment at all costs is not always in the national interest.”

“Certain foreign adversaries, including the People’s Republic of China (PRC), systematically direct and facilitate investment in United States companies and assets to obtain cutting-edge technologies, intellectual property, and leverage in strategic industries,” Trump said. “The PRC pursues these strategies in diverse ways, both visible and concealed, and often through partner companies or investment funds in third countries.”

The memorandum instructs U.S. officials to restrict investments from foreign entities in technology, critical infrastructure, healthcare, agriculture, energy, raw materials, or other strategic sectors. The policy instructs the government to “fast track” easing of those restrictions if an investor can verify that they’re not tied to foreign adversaries such as China. 

The letter says Trump will use the Committee on Foreign Investment in the United States (CFIUS) to restrict PRC-affiliated investments in critical infrastructure and technology.

The president will also “work to deter” American investment in the Chinese military-industrial sector by blocking assets and using sanctions under the International Emergency Economic Powers Act (IEEPA).

The administration will also review whether to suspend or terminate the 1984 United States-The People’s Republic of China Income Tax Convention.

“That tax treaty, along with the PRC’s admission to the World Trade Organization and the related undertaking by the United States to accord unconditional Most Favored Nation treatment to goods and services of the PRC, led to the deindustrialization of the United States and the technological modernization of the PRC military,” the memo said.

The memorandum comes three weeks after Trump installed a 10% tariff on Chinese goods.