Memo Signals Trump Unlikely to Negotiate Investment Curbs in China Trade Talks, Researcher Says
President Donald Trump’s recently issued “America-first investment policy” memo suggests that the administration may focus potential trade negotiations with China around purchases of U.S. exports and tariff issues rather than national security issues, said Martin Chorzempa, a senior fellow with the Peterson Institute for International Economics.
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The memo previews efforts to expand both inbound and outbound foreign investment restrictions for deals involving “foreign adversaries,” which it defines as China, Hong Kong, Macau, Cuba, Iran, Russia, Venezuela and North Korea (see 2502240051).
It signals that “further financial decoupling between the United States and China is coming, and nothing in the order suggests its provisions could be rolled back in the event of a deal on trade and other issues,” Chorzempa wrote in a recent analysis for PIIE. “They suggest that the Trump administration may focus negotiations more narrowly on purchases of US goods and tariffs while continuing to tighten national security restrictions on investment to and from China.”
Chorzempa noted that Beijing had reportedly hoped to “offer large-scale Chinese investments” in the U.S. as part of possible future trade negotiations with the Trump administration, but the hard stance outlined in Trump’s memo makes that seem unlikely. He added that the “president’s call to restrict investments from China in US technology, critical infrastructure, and energy could complicate one avenue to a deal.”