President Donald Trump’s administration could invoke the International Emergency Economic Powers Act to put forth new restrictions on investments by the Chinese as part of its move to clamp down on the trade deficit with China.
The Financial Times, citing comments made during a conference by Heath Tarbert, assistant treasury secretary for international markets and investment policy, reported that the White House is considering invoking that act, which would give President Trump the ability to restrict Chinese investments into areas such as chips, robotics and other industries where the U.S. thinks China is going to try to obtain U.S. technological information. The move, noted the report, comes as there are already signs showing that investments between the two countries have been hurt by the prospect of tariffs and a trade war.
While the idea of invoking the International Emergency Economic Powers Act has been reported as one of the potential strategies, Tarbert is the first government official to say publicly that the Trump Administration is looking at the idea. Currently, the Treasury Department is creating a plan to curb new investments which would go further than what the Committee on Foreign Investment in the U.S., which oversees deals to ensure there are no national security risks, can do.
Congress is also mulling a bill that would expand the Committee on Foreign Investments to also cover investments in joint ventures in China and other countries. “We have separate offices in Treasury which are considering those two issues distinctly,” Tarbert said at the Institute of International Finance conference, reported the Financial Times, noting the government agency has until the end of May to send its plan to the President. Still, there are critics who are against expanding the Committee on Foreign Investments power, including business groups that represent the likes of IBM and GE. They are worried that measures on investments outside the U.S. are going to be too encompassing.