Trump eases his approach to Chinese trade
Trump administration has decided to rely on existing laws to restrict Chinese investment in the US
The Trump Administration has decided to rely on existing laws to restrict Chinese investment in the US, dropping consideration of alternative approaches.
The Trump administration has decided to rely on existing laws, being updated by Congress, to restrict Chinese investment in the US, dropping consideration of alternative approaches that would have allowed the White House to impose stricter limits on its own.
Employing existing laws, rather than executive action, “is the best approach to protect US technology,” a senior administration official said Wednesday morning, briefing reporters on the decision.
Officials had been considering invoking executive authority to impose a much tougher crackdown on Chinese investment—part of a broader administration effort to pressure China to alter its trade and economic policies—but appear to have bowed to complaints from US businesses and members of Congress worried about the potential economic fallout from more extreme measures.
The team of officials briefing reporters repeatedly stressed that the administration had decided to work with Congress on updating the 1980s law known as the Committee on Foreign Investment in the US, or CFIUS, which gives the executive branch the power to review foreign investments seen as a national security risk.
They repeated that the bill, which has passed both houses of Congress, has strong bipartisan support. One official also said that the administration sought a policy that “maintains the open investment climate in the United States that has helped our economy grow over the years”— a principle many business groups warned could be undermined by some of the options under consideration. In addition to announcing the White House strategy for approaching investment limits in the US, the officials said that the Commerce Department will “assess the current export regime” and consider tightening rules on what kinds of sensitive technologies might be shared with other countries. The announcement was still studying new limits—rather than announcing fresh curbs—and marked a softening from the policies that officials had been considering announcing this month.
The officials stressed that the new curbs went beyond China and were aimed at protecting US technology, not punishing or pressuring any specific country. Asked if the decision to pursue the softer line was intended as an olive branch to China to defuse mounting economic tensions, one official said: “this is a tough approach. This is an approach we have determined will be responsive to the concerns that have been raised” about whether Chinese acquisition of US technologies threatens American competitiveness. The official added that President Donald Trump “has been clear he is interested in remaining in discussions, and working through problems with [Chinese] President Xi [Jinping]. At the direction of the president, we remain open in those conversations.” In the briefing, the officials declined to answer questions about why the administration had backed away from more harsh approaches.
Mr Trump “went through a deliberative process,” and advisers “provided the president with options,” one official said. “It’s in the best interests of the administration and the American people to explore a whole range of options.” Mr Trump later issued a statement saying he had concluded that working through Congress was sufficient to address the concerns his administration has raised about Chinese investments. He added that if the House and Senate fail to reconcile their versions of the new CFIUS law, he reserves the right to
invoke the more extreme options his administration has rejected and that he will direct the administration to “deploy new tools, developed under existing authorities, that will do so globally.”