US weighs emergency powers to curb China tech investments
THE TREASURY Department is considering using an emergency law to curb Chinese investments in sensitive technologies, as the Trump administration looks to punish China for what it sees as violations of American intellectual-property rights.
The US government is reviewing the possible use of a law known as the International Emergency Economic Powers Act, said Heath Tarbert, an assistant secretary in the agency’s international affairs office. Under the 1977 IEEPA law, President Donald Trump could declare a national emergency in response to an “unusual and extraordinary threat,” allowing him to block transactions and seize assets.
Trump is pushing his administration to crack down on what he considers unfair trade practices by China.
He has threatened tariffs on as much as US$ 150 billion ( RM570 billion) in Chinese imports in response to intellectual property theft and forced technology transfer. Beijing has retaliated by proposing tariffs on US$ 50 billion of American goods, and pledging further action if necessary.
The president asked Treasury Secretary Steven Mnuchin to consider investment restrictions on Chinese firms after the administration released the results of its probe into China’s IP practices last month.
Beijing fired back forcefully last Friday.
“The US is thinking and acting like a bully – only it can have high tech and others cannot.
“With regard to the high tech restrictions, they are citing the reason of national security, but their motivation is protectionism. Is the US really that fragile?” foreign ministry spokeswoman Hua Chunying said at a daily briefing.
Mnuchin has until around May 21 to propose executive action to address concerns about investments in the US “directed or facilitated by China in industries or technologies deemed important,” according to the Mar 22 presidential memo.
While investors have so far focused on Trump’s plan to impose tariffs on Chinese imports, new restrictions could deepen a slowdown in Chinese investments in the US since Trump took office, hurting the ability of American companies to raise capital and holding down valuations.
Acquisitions by Chinese firms in the US fell to US$ 31.8 billion last year from US$ 53 billion the year before, according to data compiled by Bloomberg.
The directive from Trump to consider investment restrictions deals only with China, Tarbert said.
Treasury officials are working on plans to identify technology sectors in which Chinese companies would be banned from investing, such as semi- conductors and so- called 5G wireless communications, according to four people with knowledge of the proposal, who described the matter on the condition of anonymity last month. — WP-Bloomberg