US President Donald Trump has suggested that his administration might back away from previously announced plans to impose limits on Chinese investment in US technology companies and high-tech exports to China, instead choosing to call upon the US Congress to act.
Trump, during a meeting with US lawmakers, pushed back on reports that the US was preparing the investment restrictions and suggested the administration could do it through the foreign investment reviews under the Committee on Foreign Investment in the United States.
“We have to protect these companies. We can’t let people steal their technology,” Trump said when asked if the US administration was preparing the investment restrictions.
Photo: Bloomberg
The US technology could be protected through the committee, he said.
“We have a lot of things that we can do it through and we’re working that out,” Trump said.
The US administration is expected to urge the US Congress to finalize legislation modernizing a law that allows the government to review foreign investments for national security concerns, according to a person familiar with the plans who spoke under condition of anonymity and was not authorized to speak publicly.
The US House of Representatives on Tuesday approved a bill that would make changes to the committee’s law. The provisions are expected to be considered as part of a joint House-Senate conference committee reviewing a defense policy bill approved by the US Senate last week.
US Secretary of the Treasury Steven Mnuchin on Monday on Twitter called media reports that the US administration was readying investment restrictions on China “false.”
Any restrictions would not be aimed solely at China, but at “all countries that are trying to steal our technology,” Mnuchin said.
The comments ran counter to a May 29 White House statement that said: “The United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology.”
The controls would be announced by tomorrow and would “be implemented shortly thereafter,” it said.
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.
Amanda DeBusk, chair of the international trade practice at Dechert LLP and a former US Department of Commerce official, said the move away from broad restrictions on Chinese investment “would be a conciliatory step” that might lead to a US-China ceasefire on trade before tit-for-tat tariffs begin to kick in.
DeBusk said that trade tensions have driven the US stock market down and said that Trump might be seeking a way to avoid “a potentially catastrophic” trade war with China.
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