The Trump administration de-escalated a confrontation with China on Wednesday, dropping plans to impose strict limits on Chinese investment in U. S. technol
WASHINGTON – The Trump administration de-escalated a confrontation with China on Wednesday, dropping plans to impose strict limits on Chinese investment in U. S. technology companies and instead urging Congress to strengthen existing laws that apply to all foreign countries.
The administration’s more conciliatory stance raised at least the possibility that the two sides could work toward a negotiated end to the punishing tariffs that they’re set to impose on each other’s goods beginning July 6. And it fueled a rally in financial markets, which had been reeling on fears of an escalating trade war with China.
It was unclear whether the policy shift would lead to a cease-fire between the world’s two biggest economies, which have been edging toward a high-risk confrontation, or whether any formal negotiations might soon begin. But the top White House economic adviser said the two sides are “in communication.” And analysts said they took heart that the Trump administration had offered some semblance of an olive branch to Beijing.
“It seems like this move is being undertaken with the goal of coming to a resolution ultimately on the trade policy issues the U. S. has with China,” said Stephen Ezell, who manages global innovation policy at the Information Technology and Innovation Foundation think tank.
Last month, the White House said that by the end of this week, it would announce tight new restrictions on Chinese investment. The idea was to keep state-owned or politically connected Chinese companies from buying advanced U. S. technology. Beijing is seeking such technology as part of its “Made in China 2025” initiative, a roadmap to its goal of becoming a global tech leader.
But on Wednesday, the Trump administration announced a less-draconian approach: It said it would work with Congress to strengthen reviews of foreign investment under the existing Committee on Foreign Investment in the United States, or CFIUS, led by Treasury Secretary Steven Mnuchin. CFIUS applies to all countries — not just China — and its reviews are conducted on a case-by-case basis.
