New restrictions that are being considered by the Trump administration could limit Chinese investment into Us technology companies.
- The Trump administration is considering a crackdown on Chinese investments into US companies.
- The new rules would focus on preventing Chinese investment into emerging technologies like 5G.
- Other ideas include "reciprocal" limits on investments into industries that China is already protecting.
The Trump administration could move to block China from investing in certain types of US tech companies as part of a wide-ranging crackdown on Chinese trade with the US, according to a new report.
Bloomberg reported Tuesday that as part of new sanctions on China — which included Thursday's announcement of tariffs on $50 billion worth of Chinese goods — the Treasury Department is looking into using a decades-old national-security law to prevent Chinese firms from investing in up-and-coming technologies.
Trump said last week that his administration would look into ways to limit Chinese investments into the US as punishment for China's theft of US intellectual property.
The new possible restrictions would be created using the 1977 International Emergency Economic Powers Act, according to Bloomberg. The administration would place limits under the assumption that Chinese investment in these businesses would constitute an economic threat to US national security, with a focus on emerging tech like 5G networks and semiconductors.
The reasoning would be similar to the Trump administration's justification for blocking semiconductor Broadcomm's takeover of rival Qualcomm earlier in March.
The Treasury Department is also mulling other steps, according to the report. Among the possible crackdowns is a "reciprocal" restriction in response to China's protections of some industries.
Currently, China limits foreign investment into some industries that its government is trying to grow domestically. So under the new rule, the US would also prevent investment in those industries coming from China to the US. For instance, since China places limits on investment into specialty chemicals, the US could move to do the same.
Additionally, the administration is considering an expansion of the Committee on Foreign Investment in the US, a panel that reviews takeovers of US companies by foreign firms.
Fears of a trade war with China were quelled on Sunday after reports that the Trump administration had entered into negotiations with the Chinese government to address concerns over the theft of IP and other trade issues. It is unclear how these new restrictions could play into those talks.