The Treasury Department is restricting investments in U.S. companies in an effort meant to protect critical technology, data and infrastructure from foreign sabotage.
A Treasury panel now has the authority to ban foreign investors and businesses from acquiring stakes in U.S. firms involved in industries deemed essential to national security, the department announced on Monday. The regulations were issued under a 2018 law that drastically expanded the power of a Treasury panel, called the Committee on Foreign Investment in the U.S. (CFIUS).
The committee was created in 1975 to block foreign acquisitions of U.S. companies that put the country at a competitive disadvantage to international rivals or threaten national security. The panel is chaired by the Treasury secretary and has been central to President TrumpDonald TrumpTrump defends indicted GOP congressman House to vote Thursday on holding Bannon in contempt Youngkin calls for investigation into Loudoun County School Board amid sexual assault allegations MORE’s battle against China’s push to dominate global technology.
“These regulations strengthen our national security and modernize the investment review process,” said Treasury Secretary Steven MnuchinSteven MnuchinThe Hill's Morning Report - Presented by Alibaba - Biden jumps into frenzied Dem spending talks Former Treasury secretaries tried to resolve debt limit impasse in talks with McConnell, Yellen: report Menendez, Rubio ask Yellen to probe meatpacker JBS MORE.
“They also maintain our nation’s open investment policy by encouraging investment in American businesses and workers, and by providing clarity and certainty regarding the types of transactions that are covered.”
CFIUS was initially only empowered to block foreign takeovers of U.S. firms. But a bipartisan bill signed by Trump in 2018 expanded the panel’s authority to block deals even if they don’t give foreign investors control of an American company.
Under the new regulations, the committee can block foreign investors from acquiring a stake in certain U.S. companies if the investor would be involved in the firm’s board of directors or have access to nonpublic information.
Companies covered under the new regulations include U.S. computer technology firms; telecommunications, utilities, energy and transportation companies; and firms that use a wide range of personal financial and biographical data.
As tensions build between the U.S. and China, lawmakers in both parties have grown increasingly worried about businesses exposing valuable technology or vulnerabilities to Beijing through connections to Chinese companies.
Mnuchin has used CFIUS aggressively since taking the helm of the Treasury Department in 2017, blocking the sale of several U.S. tech companies to Chinese firms. The panel also opened a probe into the Chinese ownership of TikTok, a popular social media platform, and forced a Chinese company to sell Grindr, a dating app for gay men, over privacy concerns.
China has reportedly agreed to take steps to curb the theft of intellectual property from U.S. firms in a preliminary trade deal that Trump and Chinese officials are set to sign Wednesday. But the nearly two-year trade war between the U.S. and China has deeply damaged relations and commerce between the world's largest economies. Chinese investment in the U.S. plunged nearly 90 percent during Trump's first two years in office, according to data from research firm Rhodium Group.