US Treasury issues new rules on foreign investments

The law Congress passed in August did not single out China, but it was clear lawmakers and the Trump administration had Beijing in mind. The administration has accused China of using predatory tactics to steal American technology.

The administration has imposed penalty tariffs on about $250 billion of Chinese imports, triggering retaliation by China, as a trade war between the world’s two biggest economies has widened.

As part of the trade battle, President Donald Trump had initially ordered the Treasury Department to draft investment restrictions aimed specifically at China. But in June, Trump decided to back Congress’ effort to tighten existing investment restrictions by increasing the powers of the existing Committee on Foreign Investment in the United States, or CFIUS.

This Treasury-led inter-agency panel was given the power to review investments that grant foreigners access to a U.S. company’s high-tech secrets. Before the law was strengthened, the committee could only review foreign investments that were big enough to give the foreign group control of the U.S. company.

The new rules , published Wednesday in the Federal Register, will go into effect on Nov. 10 and will implement a pilot program covering an initial 27 industries. Officials will use the experience gained from these reviews to craft expanded regulations which will fully implement the new law.

The legislation received strong bi-partisan support in Congress, with lawmakers from both parties expressing concerns about the need to prevent China from obtaining American technology by buying or investing in U.S. companies.

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AP Economics Writer Paul Wiseman contributed to this report.

Martin Crutsinger, The Associated Press

by Canadian Press

US Treasury issues new rules on foreign investments

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