WASHINGTON — Holding off on another trade confrontation with China, President Trump asked Congress on Wednesday to strengthen a government agency that can limit or kill investments by China and other nations suspected of stealing U.S. technology.
Aides had urged Trump to directly impose limits on Chinese investment in U.S. technology companies, but Trump said he would back congressional efforts to give new powers to the existing Committee on Foreign Investment in the United States (CFIUS).
New legislation “will enhance our ability to protect the United States from new and evolving threats posed by foreign investment while also sustaining the strong, open investment environment to which our country is committed and which benefits our economy and our people,” Trump said in a written statement.
The administration’s decision comes in the midst of a budding trade war between the United States and China, with each country threatening the other with more and more on tariffs on exports.
Trump and aides described their tariffs as retaliation for what they call unfair Chinese trade practices, including theft of technology and intellectual property. China has denied the allegations and threatened retaliation of its own.
U.S. and Chinese officials are negotiating their trade disputes.
Stock futures, which had been lower because of fears that Trump might institute Chinese investment bans and escalate a trade war, ticked up after news that his plan is less restrictive.
Some Trump administration officials, including trade adviser Peter Navarro, have urged tough investment restrictions targeting China, including an order saying that companies with at least 25% ownership would be automatically banned from investments involving American companies.
A May 29 statement from the White House pledged “specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology.”
Other advisers, notably Treasury Secretary Steve Mnuchin, urged a less aggressive approach, and backed beefing up existing laws that permit the government to review and potential reject foreign investments over national security concerns.
The House approved a bill this week to strengthen the CFIUS law, and a joint House-Senate conference committee on defense policy bill is expected to take up the matter as well.
In endorsing what lawmakers call the Foreign Investment Risk Review Modernization Act (FIRRMA), Trump said it “will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity.”
If Congress fails to pass legislation, Trump said, “I will direct my Administration to deploy new tools, developed under existing authorities, that will do so globally.”
Some lawmakers questioned Trump’s less aggressive approach.
“If in fact President Trump is now backtracking on tough limits on Chinese investment, it is a VERY BIG MISTAKE,” tweeted Sen. Marco Rubio, R-Fla. “#China is strategically buying up U.S. companies specializing in cutting edge technology. What they don’t steal from us they buy away from us.”
By: David Jackson, USA Today