On February 21, 2025, President Trump issued a memorandum to various U.S. government agencies setting forth an “America First Investment Policy” (the “Memorandum”). While the Memorandum is a call to arms for the Committee on Foreign Investment in the United States (“CFIUS”) to further restrict Chinese investments into the United States and for the U.S. government to use the recently implemented U.S. Outbound Investment Security Program (“OISP”) to restrict additional U.S. outbound investment into China (described in our alert memorandum linked here), the Memorandum also aims to facilitate inbound investment from allies and partners.
Provided below is a summary of certain key issues included in the Memorandum, most of which are subject to further clarity, action, and rules/regulations from the U.S. government.
Promoting Foreign Investment into the United States from Allies and Partners
The Memorandum highlights the Trump administration’s plans to facilitate foreign investment into the United States from allies and partners, including:
- New Fast-Track Process: A new “fast-track” process to facilitate additional investments from specified allies and partner sources in U.S. businesses involved with advanced technology and other important areas. According to the Memorandum, the process will allow for increased foreign investment subject to appropriate security provisions, including requirements that the specific foreign investors avoid partnering with U.S. foreign adversaries (e.g., China).[1]
- Passive Investments: A general policy stance of encouraging passive investments into the United States by all foreign persons when such investments are non-controlling stakes with no voting, board, or other governance rights and do not confer managerial influence, substantive decision-making, or non-public access to technologies or technical information, products, or services.
- Expedited Environmental Reviews: An “expedited” environmental review process for any investment in the United States over $1 billion.
- CFIUS Mitigation Agreements: Ending the use of “overly bureaucratic, complex, and open-ended” mitigation agreements for investments from foreign adversary countries. Instead, the Memorandum indicates that administrative resources would instead be directed toward facilitating investments from key partner countries, and mitigation agreements generally should include “concrete actions that companies can complete within a specified time, rather than perpetual and expensive compliance obligations.”
The Memorandum explains that, for investment in U.S. businesses involved in critical technology, critical infrastructure, personal data, and other sensitive areas, restrictions on foreign investors’ access to U.S. assets will “ease in proportion to their verifiable distance and interdependence from the predatory investment and technology-acquisition practices” of China and other foreign adversaries or threat actors.
Enhanced Restrictions on Foreign Investments into the United States
In addition to promoting investments by allies and partners, the Memorandum proposes enhanced restrictions on certain types of investments into the United States, including:
- Focus on Restricting Chinese Investment in Strategic Sectors: The Memorandum directs CFIUS to restrict Chinese investments in strategic U.S. sectors, such as technology, critical infrastructure (the Memorandum references elsewhere ports and shipping terminals), healthcare, agriculture, energy, raw materials, and other strategic sectors. It also directs the establishment of new rules to stop PRC-affiliated persons from buying “critical American businesses and assets”.
- Expanded Jurisdiction over Greenfield Investments: CFIUS already has authority to review greenfield investments involving real estate located in close proximity to certain U.S. government facilities. While noting that the Trump administration will protect U.S. farmland and real estate near sensitive facilities, the Memorandum indicates that the Trump administration also will seek to strengthen CFIUS authority over “greenfield” investments to restrict foreign adversary access to U.S. talent and operations in sensitive technologies (especially artificial intelligence), and to expand the remit of “emerging and foundational” technologies addressable by CFIUS.
Expansion of OISP to Cover Additional Transactions and Sectors
The Memorandum also provides further guidance on the scope of an ongoing review of the OISP by the Treasury Department (in consultation with other agencies), previously announced in the “America First Trade Policy” of January 20, 2025. This review aims to determine whether the OISP adequately addresses national security threats posed by China, and includes consideration of:
- Expanded Sectors/Covered Activities: The Memorandum directs the regular review and update of sectors covered by the OISP, including by the Office of Science and Technology Policy. In addition to the existing covered sectors (i.e., semiconductors and microelectronics, quantum information technologies, and artificial intelligence), the Memorandum contemplates expanding the scope of the OISP to cover biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and any other area implicated by China’s “Military-Civil Fusion strategy.”
- Expanded Covered Transactions: The Memorandum also contemplates: (i) continuing to restrict (or potentially broadening) the types of transactions covered by the OISP, including private equity, venture capital, greenfield investments, corporate expansions, pension funds, university endowments, and other limited-partner investors; and (ii) narrowing the scope of the publicly-traded-securities exception to the existing OISP.
Other Issues
The Memorandum also: (i) directs the executive branch to consider all policy options to prevent U.S. persons from investing in the Chinese military-industrial sector, including new blocking sanctions or other restrictions under Executive Order (E.O.) 13959, which established the Non-SDN Chinese-Military-Industrial Complex Companies List (“NS-CMIC List”) (described in our alert memorandum linked here); (ii) contemplates withdrawing from a 1984 bilateral tax treaty between the United States and China that provides tax incentives for U.S. persons to invest in China; (iii) directs the review of regulations authorizing “foreign-adversary companies” to trade on United States exchanges; and (iv) directs the Trump administration to work with Congress to review existing statutes to determine whether they are aligned with the Trump administration’s policy goals, including the Holding Foreign Companies Accountable Act of 2020 and the Employee Retirement Security Act of 1974.
[1] As used in the Memorandum, the term “foreign adversaries” includes the People’s Republic of China (“PRC”), including the Hong Kong Special Administrative Region and the Macau Special Administrative Region; the Republic of Cuba; the Islamic Republic of Iran; the Democratic People’s Republic of Korea; the Russian Federation; and the regime of Venezuelan politician Nicolás Maduro.