Trump signals shift from imposing China investment limits

Trump signals shift from imposing China investment limits

Trump signals shift from imposing China investment limits

In a statement Wednesday, Trump said his administration was banking on Congress' passing the Foreign Investment Risk Review Modernization Act, which would give more power to the committee. The Dow Jones industrial average, which fell more than 165 points Wednesday, is down more than 9percent from its January peak. "#China is strategically buying up US companies specializing in cutting edge technology".

Other Republicans who were more anxious about Trump's battle with China applauded the course of action.

U.S. President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.

James Lewis, who studies technology policy at the Center for Strategic and International Studies, said he foresees no quick resolution to the dispute.

Mnuchin, who chairs the CFIUS review committee, said Wednesday that if Congress doesn't approve a reform bill, the White House will take another look at it powers to protect sensitive USA technology. Trump has used the tool more frequently than past administrations.

Washington and Beijing are sparring over China's attempts to supplant USA technological dominance, through cyber-theft and policies that force American companies to hand over technology in exchange for access to the Chinese market.

"China will closely monitor the legislation process and evaluate its potential impact on Chinese companies", Chinese commerce ministry spokesman Gao Feng told reporters in a regular briefing in Beijing.

The US is planning to impose tariffs on US$34 billion of Chinese goods on Friday next week, an amount that could reach US$450 billion if China refuses to back down and retaliates with sanctions of its own. This committee, which falls under the Treasury Department, looks at transactions "that could result in control of a USA business by a foreign person", and then determines "the effect of such transactions on the national security of the United States".

The House on Tuesday approved a bipartisan bill 400 to 2. "A strong CFIUS enhanced by Firrma will deter foreign investment that risks exposing sensitive U.S. technology", he said. The Chinese don't want to play by the rules.

The government is anxious that the move means the United States will use national security concerns unfairly in order to restrict Chinese investments.

It can make recommendations to the president, who can stop a deal from going though, although in practice a negative CFIUS finding alone is sometimes enough to kill off a deal.

"If in fact President Trump is now backtracking on tough limits on Chinese investment, it is a VERY BIG MISTAKE", Sen. Rather they say it's a process that is well understood by the USA business community and one that maintains an open investment climate. When Gary Cohn, the White House's top economic adviser, resigned earlier this year, Trump increasingly solicited advice from Navarro, a staunch protectionist.

Trump said the legislation would offer "additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity".

Mnuchin told reporters that the differences among Trump's advisers had been overblown.

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