President Trump issues “America First Investment Policy” proposing significant changes to inbound and outbound investment regimes

CFIUS background

CFIUS is a U.S. Government interagency committee authorized to review certain transactions involving foreign investments in U.S. businesses and foreign purchases or leases of U.S. real estate in order to determine the effect of such transactions on the national security of the United States. 

CFIUS has the authority to review (i) certain transactions that could result in a foreign person’s control of any U.S. business, (ii) a foreign person’s acquisition of a noncontrolling interest in certain types of U.S. businesses, and (iii) a foreign person’s purchase or lease of certain U.S. real estate in proximity to certain U.S. ports or military installations. 

OISP background

On January 2, 2025, the U.S. Department of the Treasury (“Treasury”) established the OISP regulations pursuant to President Biden’s Executive Order 14105, entitled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.” The OISP regulations prohibit or require notification to Treasury of U.S. person direct or indirect transactions with certain Chinese-affiliated companies engaged in the (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence (“AI”) sectors.

National Security Presidential Memorandum

On February 21, 2025, the President issued NSPM-3, which outlines the priorities and objectives of the administration’s efforts to address national security concerns stemming from foreign investments in U.S. businesses and outbound U.S. investments in Chinese-affiliated companies. NSPM-3 follows a January 20, 2025 presidential memorandum entitled “America First Trade Policy”, which ordered a review of U.S. trade and economic policies, and noted potential changes to the OISP regulations.

• Establishing a “fast-track” CFIUS review process for investments in U.S. businesses involved in “advanced and other important sectors” by specified allied-country investors. To be eligible for the “fast-track” process, allied-country investors will need to comply with certain requirements focused on preventing partnerships with foreign adversaries¹. 
• In consultation with Congress, enhancing CFIUS’s authority over “greenfield” investments. Certain foreign person “greenfield” investments are currently excepted from CFIUS’s jurisdiction. 
• Using CFIUS to restrict Chinese investments in U.S. technology, critical infrastructure, healthcare, agriculture, energy, raw materials, or other strategic sectors. Today, the CFIUS regulations do not per se restrict or prohibit foreign investments from any identified country. 
• Expanding the scope of “emerging and foundational” technologies that may trigger CFIUS’s review. Foreign investments in U.S. businesses engaged in certain activities with respect to emerging and foundational technologies currently may fall within CFIUS’s jurisdiction or trigger CFIUS’s mandatory filing requirements. 
• Limiting the scope, applicability, and timelines of CFIUS mitigation agreements to ensure they consist of specified obligations to be fulfilled over a finite period. Currently, if parties enter into a CFIUS mitigation agreement as a condition of CFIUS approval of a transaction, CFIUS mitigation conditions typically apply in perpetuity, unless terminated by CFIUS. 
• Considering the expansion of the sectors covered by the OISP regulations to impose restrictions on outbound investments in Chinese companies engaged in activities in the biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other sectors. The OISP regulations currently only impose notification requirements or prohibitions on U.S. person investments in Chinese-affiliated companies engaged in the AI, quantum information technology, and semiconductor and microelectronics sectors. 

Of note, NSPM-3 is not limited to policy statements or proposed changes to the CFIUS or the OISP regulations, and covers other facets of U.S. investment policy, including tax, environmental, and securities regulations. However, NSPM-3’s key features reflect potential changes or significant expansions of the CFIUS and OISP regulations affecting the U.S. Government’s authority to review foreign investments in the United States or outbound investments in Chinese companies. While certain of the proposed changes to CFIUS’s authority and the OISP appear to reflect recent legislative and policy proposals (e.g., expansion of the OISP regulations to cover sectors beyond AI, quantum, and semiconductors and microelectronics, such as biotechnology), other policy proposals, such as the development of a “fast-track” for CFIUS review of allied-country investments, may present novel approaches to modifying CFIUS’s authority and review processes.

NSPM-3 includes references to foreign investors or U.S.-allied business partners “avoid[ing] partnering” with or seeking “verifiable distance and independence” from “foreign adversaries”, including China and Russia. NSPM-3 therefore signals the Trump Administration’s emphasis on encouraging or requiring U.S. and non-U.S. companies to scrutinize, and in some cases, cease their relationships with foreign companies (e.g., Chinese companies) that the U.S. Government may perceive to raise U.S. national security concerns in order to obtain favorable treatment in CFIUS’s review of foreign investments. 

NSPM-3 highlights the Trump Administration’s key priorities regarding U.S. policy on addressing the national security risks of inbound and outbound investments. Ultimately, though, many of NSPM-3’s proposals appear to require further executive action or statutory changes, including amendment of CFIUS’s implementing statute, the Defense Production Act of 1950, as amended. The extent of the impact of NSPM-3’s proposals on foreign investors and U.S. businesses will in large part depend on how these policy changes are implemented. 

Authored by Anne Salladin, Brian Curran, Patrick Miller, Zachary Alvarez, and Nicki Ghazarian-Foye.