Trump Restrictions On Chinese Tech Investment Looser Than Expected

trump china — U.S. restrictions on Chinese investments were looser than expected. US President Donald Trump and China's President Xi Jinping are pictured leaving a business leaders event in Beijing on Nov. 9, 2017. Nicolas Asfouri/AFP/Getty Images

After several days of worried speculation by the markets, it sounds like the White House is easing up on China a bit. Reports earlier this week that President Donald Trump would introduce measures to stop Chinese investments in U.S. tech companies were shaken off by a Wednesday announcement that softer regulations would go into place instead.

The Senate has adopted changes to give the Committee on Foreign Investment (or CFIUS) more power rather than introduce sweeping new restrictions on Chinese investment in U.S. tech firms, according to CNBC. The Wall Street Journal reported Sunday that the White House was looking to block companies with more than 25 percent Chinese ownership from buying American tech companies.

Instead, the CFIUS will now be able to block joint ventures, which it did not have the authority to do previously. That means the committee will be able to block Chinese acquisitions of U.S. firms, but it will not be as broad and automatic as the Wall Street Journal’s initial report made it seem.

Treasury Secretary Steve Mnuchin stuck to his boss’s script and called those reports “fake news” after they came out. Whether the softer restrictions came as a reaction to the reports or were the plan all along remains to be seen.

On behalf of @realDonaldTrump, the stories on investment restrictions in Bloomberg & WSJ are false, fake news. The leaker either doesn’t exist or know the subject very well. Statement will be out not specific to China, but to all countries that are trying to steal our technology.
— Steven Mnuchin (@stevenmnuchin1) June 25, 2018

In a statement to CNBC, Mnuchin maintained that the new measures are not strictly aimed at China, though China’s supposed theft of American intellectual property is what kicked off the recent trade dispute.

"We are not singling out China, but we will protect technology transfer to China as we will to other important areas,” Mnuchin said.

The Trump administration and China have been trading blows in the forms of tariffs and other trade threats for months now, leading to concerns of a full-blown trade war in the near future. Chinese investment in U.S. companies has dropped dramatically since Trump took office.

The stock market reacted positively to the White House’s looser-than-expected restrictions, according to MarketWatch.

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