The Trump Administration’s new memorandum introduces the ‘America First Investment Policy’, outlining imminent changes to U.S. foreign investment regulations. Key measures aim to enhance national security by limiting foreign adversary investments and facilitating allied investments in critical sectors. The memorandum signals a shift in CFIUS and OIR operations, targeting specific sectors such as technology and infrastructure.
On February 21, 2025, President Trump released a memorandum emphasizing the implications of foreign investment in the United States and outbound investments from American entities. The memorandum reflects the objectives of the ‘America First Investment Policy’ and outlines forthcoming changes regarding the Committee on Foreign Investment in the United States (CFIUS) and Outbound Investment Regulations (OIR), aimed at bolstering national security against threats from designated foreign adversaries, namely China, Cuba, Iran, North Korea, Russia, and Venezuela.
The memorandum introduces several measures concerning CFIUS. These include adjusting access restrictions based on foreign investors’ ties to threats, establishing a fast-track review system for investments from allied countries, expediting environmental reviews for large investments, and enhancing CFIUS’s authority to limit investments from foreign adversaries in critical sectors. It also revises mitigation agreements to favor precise time-bound commitments and promotes passive investments without governance influence.
Furthermore, the OIR review emphasizes preventing U.S. investments from supporting the military-industrial complex in China, with expanded restrictions likely affecting critical sectors, such as semiconductors and biotechnology. The administration intends to assess various investment types that are currently exempted and is considering the termination of the 1984 tax treaty with China to deter U.S. investments.
Amid these developments, the administration will also examine financial auditing practices for companies under the Holding Foreign Companies Accountable Act and establish updated standards for investing in foreign adversary firms to safeguard U.S. investors’ interests. Investors are encouraged to stay informed on the implementation of these changes, as significant impacts on both domestic and foreign investment landscapes are anticipated.
The memorandum issued by the Trump Administration marks a significant shift in investment policy, aiming to protect national security by restricting certain foreign investments while promoting strategic partnerships with allies. Investors must remain vigilant in monitoring the evolving landscape, as these changes will likely affect various sectors and investment strategies.
Original Source: www.mayerbrown.com
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