On February 21, 2025, President Trump issued a new memorandum addressing both foreign investment
into the United States and outbound investment by US persons.
Without imposing immediate legal or regulatory changes, the
"America First Investment Policy" Presidential Memorandum
(the "Memorandum") sets out several objectives and
actions related to both the Committee on Foreign Investment in the
United States (CFIUS) and the new Outbound Investment Regulations
(OIR), which are already under review by the Trump
Administration.
In particular, the Memorandum aims to address national security
threats posed by "foreign adversaries," defined as the
People's Republic of China (PRC) (including Hong Kong and
Macau), Cuba, Iran, North Korea, Russia, and the Nicolás
Maduro regime in Venezuela.
MEASURES
CFIUS
With respect to CFIUS, the Memorandum outlines several measures to be addressed through new regulations, many of which are focused on per se sensitive "TID US businesses" (such businesses deal in Critical Technologies, Covered Investment Critical Infrastructure, and Sensitive Personal Data), as well as strategic sectors such as healthcare, agriculture, energy, and raw materials. In particular, the Memorandum announces the following:
- Easing Access Restrictions Based on Distance from Adversaries. Restrictions on foreign investors' access to the assets of TID US businesses will vary depending on those investors' verifiable distance and independence from perceived threat actors from the PRC and other foreign adversaries—and those actors' investment and technology acquisition practices.
- Expedited "Fast-Track" Process for Allied Investments. The Memorandum promises a new, expedited "fast track" review process to facilitate investments from allied and partner countries in advanced technology and other sectors.
- Expedited Environmental Reviews for Large Investments. Under a new policy, environmental reviews for investments over $1 billion will be expedited. The Memorandum tasks the administrator of the Environmental Protection Agency with effectuating this policy.
- Strengthening CFIUS's Authority. The Memorandum previews several potential changes to CFIUS's authority. In particular, it promises that CFIUS will be used to restrict persons affiliated with the PRC from investing in strategic sectors—including the technology, critical infrastructure, healthcare, agriculture, energy, and raw materials sectors, as well as farmland and real estate near sensitive facilities. Additionally, the Administration will seek to work with Congress to expand CFIUS's authority to address "greenfield" investments (which are statutorily exempted from CFIUS's jurisdiction), especially in sensitive sectors such as artificial intelligence, and to expand the "emerging and foundational" technologies that may trigger a mandatory CFIUS filing.
- Changes to Mitigation Agreements. Although the specifics of implementation remain to be seen, the Memorandum also states that the Administration will cease the use of open-ended mitigation agreements for investments from foreign adversary countries. Instead, the Administration will favor mitigation agreements consisting of specific, actionable steps to be completed within a set timeframe.
- Encouraging Passive Investments. Despite these changes, the Memorandum also notes a policy of welcoming passive investments from all foreign persons, including non-controlling investments without voting, board, governance, influence, access, or decision-making rights.
OIR
Among the Trump Administration's earliest actions was to undertake a review of the OIR, which were implemented at the beginning of 2025. The Memorandum sheds additional light on this review and outlines a number of measures aimed at deterring US persons from investing in the PRC's military-industrial sector as well as expanded outbound investment restrictions in additional critical sectors. Specifically:
- Reducing Exploitation by Foreign Adversaries. New rules will be established to prevent US companies and investors from supporting industries that advance the PRC's Military-Civil Fusion strategy.
- Reviewing and Expanding Restrictions on Outbound Investments. As part of the review of the OIR, the Administration will focus on new or expanded restrictions on outbound investments in several strategic sectors, including semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, and directed energy. In addition, the review will consider the types of investments by US persons to be restricted (many of which are currently exempted from the OIR), including private equity, venture capital, greenfield investments, corporate expansions, and investments in publicly traded securities and from sources including pension funds, university endowments, and other limited-partner investors.
Additional Measures
To discourage American investment in the PRC, the Administration is also reviewing whether to suspend or terminate a 1984 tax treaty with the PRC. Additionally, the Memorandum states that the Administration will:
- Determine if adequate financial auditing standards are upheld for companies covered by the Holding Foreign Companies Accountable Act.
- Review and provide a recommendation on the risk to investors from variable interest entity and subsidiary structures used by foreign-adversary companies to be listed on US exchanges.
- Publish updated fiduciary standards for investments in public market securities of foreign adversary companies in order to ensure that foreign adversary companies are ineligible for pension plan contributions.
TAKEAWAYS FOR INVESTORS
While the regulatory implementation of the Memorandum will take some time, it is clear that significant changes for both foreign and US investors are on the horizon. Investors should closely monitor developments in the coming weeks and months.
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