White House Favors Tougher Foreign Investment Oversight

   •    27 Juni 2018 20:14 WIB
united states (en)
White House Favors Tougher Foreign Investment Oversight
US President Donald Trump seeks to protect "critical technology". (Photo:AFP/Nicholas Kamm)

Washington: US President Donald Trump on Wednesday said he supports tougher restrictions on foreign investment in sensitive technology, as well as export controls on those goods, but he stopped short of imposing specific restrictions on China.

Following a report that raised "very serious issues" on China's trade and investment practices, Trump decided that a plan in Congress to enhance the powers of the Committee on Foreign Investment in the United States (CFIUS) is "the best approach to protect critical technology."

In a statement, Trump said that if Congress fails to pass strong enough legislation to protect "the crown jewels of American technology and intellectual property" then he will take further action.

After a year-long investigation into China's trade policies, the White House on May 29 said it planned to announce by June 30 "specific investment restrictions and enhanced export controls" targeting China's efforts to acquire "industrially significant technology."

However, Trump backed away from singling out China, and instead supported broader measures.

The House on Tuesday approved a bill to boost the authority of CFIUS, an interagency body that reviews potential foreign ownerships and is led by Treasury Secretary Steven Mnuchin, and to broaden the types of deals subject to oversight.

The Senate Banking Committee also approved a version of the reform, so the two chambers will have to reconcile them into a single bill for Trump to sign.

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

Even the hint of a possible CFIUS review can kill a potential investment, and has been used to block Chinese investment in ports and semiconductors.

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.

Trump also instructed the Commerce Department to look at new export controls to "further ensure a robust defense of American technology and intellectual property."

Leading agencies will work with US allies "to combat harmful technology transfer and intellectual property theft," Trump said.

While he did not mention China, the country has been the repeated target of US complaints over policies that Washington said either force companies to relinquish key technology or steal it outright.

Trump announced 25 percent import tariffs on hundreds of Chinese products to pressure the country to alter its practices. Those tariffs are due to take effect July 6.

US officials have highlighted Beijing's "Made in China 2025" industrial development plan as a source of concern, since they say it is a map for dominating significant high-tech industries from space to telecommunications, robotics, and electric cars. (AFP)