The White House announced on Wednesday that it will not limit Chinese investment in U.S. companies beyond what a current bill in Congress already promises to do.
What's the background?
Back in May, the White House had announced that it would:
implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The list of restrictions and controls will be announced by June 30, 2018.
So what changed to get the White House to announce this three days early?
Congress is already working on a bill called FIRRMA, which would strengthen the Committee on Foreign Investment in the United States. This committee, which falls under the Treasury Department, looks at transactions "that could result in control of a U.S. business by a foreign person," and then determines "the effect of such transactions on the national security of the United States."
On Tuesday, FIRRMA, which has bipartisan support, passed the House of Representatives overwhelmingly. The White House decided that this was enough to justify not looking into any additional limits on Chinese investment.
In a statement from the White House, Trump said that he advised the Treasury Secretary, Commerce Secretary, the U.S. Trade Representative, the assistant to the President for Economic Policy, and the director of the Office of Trade and Manufacturing Policy "among others," that after reviewing FIRRMA:
I have concluded that such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity. Therefore, upon enactment of FIRRMA legislation, I will direct my Administration to implement it promptly and enforce it rigorously, with a view toward addressing the concerns regarding state-directed investment in critical technologies identified in the Section 301 investigation.
However, Trump warned that if Congress failed "to pass strong FIRRMA legislation that better protects the crown jewels of American technology and intellectual property from transfers and acquisitions that threaten our national security—and future economic prosperity" that he would direct his administration "to deploy new tools, developed under existing authorities, that will do so globally.
This announcement is in contrast to the steep tariffs that the U.S. has imposed on China.
Since May, the U.S. has imposed tariffs on $250 billion worth of Chinese products imported to the United States. Trump has threatened additional tariffs on $200 billion worth of imports, which would bring the total number of imported Chinese goods targeted up to nearly the total value of all goods imported to the U.S. from China (roughly $505.6 billion in 2017).