Donald Trump’s recent move to limit Chinese investment in strategic zones shows that the president could be more aggressive in his second tenure than ever before toward U.S. competitors.
Larry Ward is a former partner of the international law firm Dorsey & Whitney and a specialist in national security laws. He said that Trump 2.0 has a more hawkish attitude toward China than he had during his first term.
These comments follow Trump’s signing of a memo last week that directed the Committee on Foreign Investment in the United States. The CFIUS aims at both promoting foreign investment in some countries and restricting investments from enemies like China to protect U.S. National Security Interests.
“The Committee on Foreign Investment in the United States (CFIUS) will be used to restrict Chinese investments in strategic U.S. sectors like technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and others,” reads a fact sheet about the memorandum released by the White House last week.
According to the White House press release, the memorandum – dubbed the National Security Presidential Memorandum – specifically targets China because it “exploits our capital and innovation to fund and upgrade their military intelligence and security operations and poses direct threats to United States’ security through weapons of mass destruction and cyber warfare.”
The release states, “Chinese hackers have targeted U.S. companies repeatedly, and recently breached the Treasury Department CFIUS Office, which is responsible for reviewing investments from foreign countries for potential national security threats.”
Ward said that while Trump had, in the past, placed tariffs against China, the new policy was a step further in responding aggressively to the danger posed by China.
This is a very different issue from tariffs. This is different than trade issues. Ward stated that foreign investment could hurt national security.
Ward cited the case of TikTok, a social media app that has been the subject of much debate over protecting Americans against being potentially targeted by China.
Ward explained, “TikTok was initially examined under the CPA and based on national security, then it was determined there were concerns about national security.”
Ward pointed out that Chinese investors in some sectors have faced restrictions for years. However, Trump’s action makes it clear that these restrictions will likely expand.
Ward explained, “You look at semiconductors, and the AI space is increasingly a tech area that has become a focus for many.” Ward added, “The policy reminds us that we will be extremely strict when it comes to Chinese investment in those sectors. We’ll also expand to other industries that haven’t received much attention over the past five or ten years.”
According to a Reuters report, China’s commerce ministry responded to Trump’s decision by accusing the U.S.
Ward, however, believes that Trump’s memo signals his commitment to fighting Chinese threats against U.S. security.
Ward stated, “The biggest thing with this policy is President Trump’s willingness to admit that China is the real threat in our region.” Ward added, “Everyone who works in this field knows it, but the fact is that the elephant was in the room. It was something that people were reluctant to talk about publicly. President Trump is saying through his policy that China is the main concern.”