Trump Softens Stance On China Technology Crackdown


The Senate approved changes to the way the Committee on Foreign Investment in the United States operates, which will allow the committee to block joint-venture takeovers of us companies by foreign companies.

The House on Tuesday approved a bill that would strengthen the CFIUS law and that bill was expected to be considered as part of a joint House-Senate conference committee reviewing a Senate-approved defence policy bill. Trump has used the tool more frequently than past administrations.

So what changed to get the White House to announce this three days early?

The new investment rules will target Chinese companies investing in technology industries in the US.

Pittenger, who tried to align himself closely with Trump during the GOP primary, has been a vocal critic of China's investments for several years.

It comes as the U.S. and China both prepare to slap tariffs on $34bn worth of each others' goods.

"China does not agree with (the U.S.) tightening foreign investment conditions using national security as reasons", he said.

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 US technology.

If Congress fails to pass the legislation quickly, Trump said, he would direct the administration to implement new restrictions under executive authority that could be applied globally.

The Treasury-led panel reviews proposed acquisitions of US assets by foreign investors, which the president can veto.

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On Wednesday, Trump said the proposed legislation would allow the United States to protect its technological crown jewels without compromising an open investment climate."I have concluded that such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity", he said.

The president, he said, has led on the issue of foreign competitors, principally from China, which is aggressively acquiring sensitive USA technologies.

It appears that this plan has been abandoned in favour of an expanded role for CFIUS.

"This is not meant to target China", Mnuchin said.

But Hunter noted that Trump's approach to policymaking is so mercurial that it's impossible to say whether the conciliatory approach will last or whether the Navarro camp will stage a comeback.

Chinese investment in the United States has declined dramatically amid heightened regulatory scrutiny.

According to the Rhodium Group, a research firm, Chinese investment in the United States fell 35 percent in 2017 from the record $45.6 billion in 2016, and has slowed to a trickle, just $1.4 billion in the first quarter of this year. He has long accused other nations of exploiting poorly negotiated trade deals and of using unfair practices to sell America far more than they buy from it.

"It's never a good idea to politicize foreign economic policy", said John Zindar, a partner with the European-American Business Organization and a former U.S. Army intelligence officer.

Meanwhile, trade tensions between the two countries remain high, with 25 per cent tariffs on US$34 billion worth of Chinese products due to come into force next week.