White House to Expand Restrictions on Chinese Investment While Streamlining Investment Reviews for Allies

On February 21, 2025, a Presidential Memorandum, “America First Investment Policy” (the “Memorandum”), announced planned changes to the Committee on Foreign Investment in the United States (“CFIUS”) and outbound investment restrictions. According to the White House, new policies will:

• Restrict investment in the United States from “foreign adversaries,” defined as China, Russia and other already embargoed countries and parties (Cuba, Iran, North Korea and the Maduro regime in Venezuela);
• Authorize further limits on U.S. investment abroad, with an emphasis on industries that advance China’s national Military-Civil Fusion strategy; and
• Promote investment in the United States from allied countries.

The Memorandum targets the purported risks posed by adversaries’ (particularly China’s) direct and indirect investment in critical U.S. companies and assets to obtain advanced technologies, as well as Chinese exploitation of U.S. capital to develop and modernize its military-industry complex. The proclamation that “[e]conomic security is national security” reinforces that the U.S. government is moving ever farther from traditional conceptions of national security in scrutinizing investment transactions.

The heads of numerous federal agencies—including, among others, the Treasury Department, the State Department, the Department of Defense, the Commerce Department and the U.S. Trade Representative—are directed to take actions to carry out the purposes of the Memorandum, including through regulation. The Memorandum does not make any immediate changes to existing regulations.

Three Key Takeaways

The Memorandum provides for:

1. Restricting investment in the United States from foreign adversaries by:

• Using CFIUS and other restrictions to block China-affiliated persons from investing in critical American businesses and assets in strategic sectors, such as technology, critical infrastructure, healthcare, agriculture, energy and raw materials.
• Protecting U.S. farmland and real estate near sensitive facilities.
• Working with Congress to strengthen CFIUS’s authority over “greenfield investments,” restrict foreign adversaries’ access to U.S. talent and operations in sensitive technologies and expand the scope of “emerging and foundational” technologies within CFIUS’s jurisdiction.
• Streamlining “mitigation” agreements for foreign adversaries’ investments in the United States (e.g., imposing a time frame for compliance actions).

2. Limiting U.S. investment abroad by:

• Further restricting U.S. investment in industries that purportedly advance China’s national Military-Civil Fusion strategy (e.g., semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy).
• Considering the application of new outbound investment restrictions to additional sectors and investment types (e.g., private equity, venture capital, greenfield investments, corporate expansions, investments in publicly traded securities) from sources including pension funds, university endowments and other limited-partner investors.
• Taking steps to deter U.S. investment in China’s military-industrial complex through potential sanctions, blocking of assets or other legal instruments.
• Assessing the sufficiency of controls introduced by Executive Order 14105 establishing the outbound investment security program.

3. Promoting investment in the United States by:

• Easing restrictions on foreign investors based on their distance from “predatory investment and technology-acquisition practices.”
• Creating an expedited “fast-track” process for investments by allied and partner investors in U.S. businesses, contingent upon those investors avoiding partnering with adversaries of the United States. CFIUS may now condition clearance of certain transactions on foreign investors’ commitment to forgo certain relationships with Chinese companies.
• Encouraging passive foreign investments in the United States.
• Expediting environmental reviews for any investment over $1 billion in the United States.

See if CFIUS may have authority to review your transaction with our CFIUS Assessment Tool.