President Donald Trump plans to ban a number of Chinese companies from investing in U.S. technology firms, as well as to block additional technology exports to Beijing, people familiar with administration plans said.
The initiatives, which are to be announced by the end of this week, are intended to prevent China from accomplishing plans presented in its “Made in China 2025” report, including becoming a world leader in areas such as information technology, aerospace, electric vehicles and biotechnology.
According to sources, the Department of Treasury is drafting rules to prevent firms with at least 25% Chinese ownership from purchasing companies involved in what the White House deems “industrially significant technology,” The Wall Street Journal writes. The ceiling could, in the end, be even lower, the sources added.
The National Security Council and the Commerce Department are additionally crafting plans for stronger exports controls in order to prevent such technologies from being shipped to China and protect the country from potential espionage.
“We’ve got trillions of dollars seeking our crown jewels of technology,” said White House trade adviser Peter Navarro last week. “There has to be a defense against that.”
Industry groups in the finance and technology sectors in particular worry that the export controls could negatively affect their businesses by preventing them from using their technological edge. The investment restrictions, on the other hand, will likely have less practical effects as Chinese investments have fallen off dramatically.
The two measures President Trump is pushing for would also use national security as justification. For investment restrictions, the people familiar with the internal debate said, the administration intends to use the International Emergency Economic Powers Act of 1977, which gives the President broad authority in the case of an “unusual and extraordinary threat.”
Some experts warn, however, that declaring everything a national security issue gives the administration power to do whatever it wants and presents “a misuse of executive power.”
Be the first to comment