President Trump Announces America First Investment Policy

On February 21, 2025, President Trump issued a National Security Policy Memorandum (“NSPM”) announcing the Administration’s “America First Investment Policy” (the “Investment Policy”)^[1] affirming the United States’ commitment to open investment while safeguarding national security. Aimed at promoting investment in the United States from allied countries while imposing stricter measures on both inbound and outbound investments from “foreign adversaries,” the Investment Policy incentivizes foreign investment in the United States by announcing a “fast track” process “to facilitate greater investment from specified allied and partner sources in United States businesses involved with United States advanced technology and other important areas.” The NSPM defines “foreign adversaries” to include the People’s Republic of China (the “PRC” or “China”), including Hong Kong and Macau, Cuba, Iran, North Korea, Russia, and the Maduro regime in Venezuela.^[2]

Continued Scrutiny of Inbound Investment

While the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) is known to have routinely scrutinized investments with a nexus to China over the past several years, the Investment Policy specifically directs the Committee to restrict Chinese investment in U.S. technology, critical infrastructure, healthcare, agriculture, energy, raw materials, or other strategic sectors. Depending on how CFIUS implements the directive, that instruction could be tantamount to a complete prohibition on Chinese investment in certain industry sectors. The Investment Policy also sets forth the goals of protecting United States farmland and real estate near sensitive facilities, strengthening CFIUS authority over “greenfield” investments, restricting foreign adversary access to United States talent and operations in sensitive technologies (especially artificial intelligence (“AI”)), and expanding the remit of “emerging and foundational” technologies addressable by CFIUS, much of which CFIUS already has jurisdiction over.

To further facilitate greater investment by U.S. allies and partner countries, the NSPM signals the relaxation of “overly bureaucratic, complex, and open-ended ‘mitigation’ agreements,” and suggests that national security agreements with parties from U.S. allied and partner countries will include target dates rather than “expensive compliance obligations.” The NSPM also underscores the Administration’s interest in attracting passive investment from foreign persons, including non-controlling stakes and shares with no voting, governance or managerial rights.

The Investment Policy is not limited to CFIUS action, and also directs executive branch agencies to establish new rules to “stop PRC-affiliated persons from buying up critical American businesses and assets, allowing only those investments that serve American interests.” Further, consistent with President Trump’s pledge to roll back many federal environmental regulations issued during President Biden’s tenure, the Trump Administration announced its intent to expedite environmental reviews by the Environmental Protection Agency (“EPA”) and other federal agencies for any investment over U.S. $1 billion, including those necessary to obtain permits and approvals typically required for the construction and operation of industrial facilities under the Clean Water Act, Clean Air Act, Endangered Species Act, and regulations implementing those and other environmental statutes.

Finally, the Investment Policy also announces audits of foreign companies on U.S. exchanges covered by the Holding Foreign Companies Accountable Act, requires reviews of the ownership structures and allegations of fraud for foreign adversary companies, and makes foreign adversary companies ineligible for pension plan contributions.

Outbound Investment

In addition to articulating the Administration’s approach to inbound investment into U.S. businesses, the Investment Policy also signals continued focus on curtailing U.S. investment into the PRC’s military industrial sector. Pursuant to the Investment Policy, the United States will establish new rules to stop U.S. companies and investors from investing in “industries that advance the PRC’s national Military-Civil Fusion strategy.”

The Investment Policy acknowledges existing rules restricting such investment, including the Chinese Military-Industrial Complex Companies Sanctions and the Outbound Investment Program administered by the U.S. Department of the Treasury (“Treasury”), which went into effect on January 2^ndand restricts investment into PRC companies engaged in certain activities related to AI, semiconductors and micro-electronics, and quantum computing, but suggests that the Administration may introduce new blocking sanctions or expand the restrictions to cover a broader swath of investments.

The Administration is also considering restricting PRC-related investments from sources such as pension funds, university endowments, and other limited partner investors. The NSPM indicates that the Administration is especially focused on the investment decisions of domestic universities stating that it is “past time for American universities to stop supporting foreign adversaries with their investment decisions, much as they should stop granting university access to supporters of terrorism.”

Implementation

The NSPM directs the Secretary of the Treasury, in consultation with other agency heads, to implement the majority of the provisions of the Investment Policy, while the Administrator of the Environmental Protection Agency is directed to expedite the relevant environmental reviews.  Separately, the NSPM directs the Attorney General, in coordination with the Director of the Federal Bureau of Investigation, to evaluate and provide a report on the risk posed to United States investors for all foreign adversary companies currently listed on domestic exchanges.