Two proposed bills that would keep China from obtaining sophisticated U.S. technology might be revised after complaints from major American companies.
According to Reuters, the companies are worried about a potential loss in sales if the legislation, which would broaden the powers of the Committee on Foreign Investment in the United States (CFIUS), were passed as is.
“We are concerned that it vastly expands the scope and jurisdiction (of CFIUS),” said Nancy McLernon, chief executive of the Organization for International Investment, a group that represents international companies with U.S. operations.
The bipartisan legislation, which was introduced in November by Republicans John Cornyn and Robert Pittenger, has the support of the Trump administration.
Sources said that Senator Cornyn’s staff is drafting changes to alleviate industry concerns, but only to a point.
“Are we listening to input? Yes. Will we make appropriate tweaks and adjustments to not inadvertently clamp down on legitimate investment? Yes,” said Representative Pittenger. “Will we soften this bill so that China or other countries with malicious intent can continue to exploit our companies to threaten America’s national security? Never.”
Currently, CFIUS scrutinizes foreign acquisitions of U.S. companies or stock transactions that could harm national security. The proposed bill would expand its power.
The corporate concern stems from two one-paragraph provisions: The first would allow foreign investment to be inspected by CFIUS if it relates to “critical technology” or a “critical infrastructure” company. The second would expand CFIUS’ powers to include reviewing sales of high-tech equipment or software licenses.
These provisions come as CFIUS has become more skeptical of high-tech deals involving China. It has even stopped transactions that would have given China access to sophisticated semiconductors or data of American citizens.
“Certain American companies need to decide whose national security they really care about: America’s or China‘s?” Pittenger said.