President Trump believes the Committee on Foreign Investments in the United States can protect American technologies from being acquired by China, having expressed strong support for U.S. Treasury Secretary Steven Mnuchin’s recent activities on that front. The Treasury Department’s panel previously advised the President to prevent Broadcom’s hostile takeover of Qualcomm and now appears to be profiling itself in the central piece of Washington’s efforts to oppose Beijing’s Made in China 2025 plan meant to turn the Far Eastern country into an even larger technological powerhouse.
CFIUS has been making its merger review policies stricter in recent times, though Mr. Mnuchin previously described that move as a general effort intended to bolster U.S. national security and not a concentrated push against China. President Trump largely reiterated those comments while speaking to reporters earlier this week but didn’t confirm recent reports that Washington is preparing severe restrictions on foreign acquisitions of American companies with significant technological capabilities. Under the new ruleset, CFIUS would even be able to block minority investments in critical American technologies, regardless of whether they’re coming from China or anywhere else in the world, insiders claimed earlier this week. The House on Tuesday voted 400-to-2 to pass a legislation that would extend CFIUS’ jurisdiction to such minority stake purchases. The Senate recently passed a similar draft, with the two bills being expected to be joined in the near future.
The development is likely to further increase Washington-Beijing tensions over trade which already appeared to have escalated earlier this month after President Trump resolved to impose a 25-percent tariff on roughly $50 billion worth of Chinese technologies and intellectual property holdings. Phone maker ZTE also found itself in the middle of the international dispute after failing to comply with a 2017 settlement over its violations of certain trade sanctions and while the White House opted to mediate a lifeline deal for the company, Capitol Hill is presently pushing for its denial order to be reinstated, a move that would effectively bankrupt one of the largest telecom firms in China.