On February 21, 2025, President Trump issued the America First Investment Policy memorandum, tightening national security regulation and oversight of inbound foreign direct investments and outbound U.S. direct and portfolio (financial) investments. Though the policy is largely targeted at investment relations with China (including Hong Kong and Macau), it also specifically identifies other “foreign adversary” nations for additional scrutiny: Cuba, Iran, North Korea, Russia, and Venezuela. 

The memorandum instructs the Committee on Foreign Investment in the United States—CFIUS, an interagency executive branch body screening foreign investments in the United States for national security concerns—to restrict persons affiliated with the People’s Republic of China from investing in technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and other strategic sectors. Currently, CFIUS authority covers only mergers and acquisitions of U.S. entities, but the memorandum calls for working with Congress to expand CFIUS’s mandate to cover “greenfield” investments—starting a new business operation from scratch—as well. Previously, CFIUS has not covered greenfield investments because such investments do not pose obvious risks of cooptation and acquisition of sensitive U.S. technologies. The memorandum directs CFIUS to restrict purchases of farmland and other real estate near sensitive facilities, such as U.S. military bases. 

The memorandum builds on a series of Biden administration policies to restrict U.S. investments and the participation of U.S. “talent” in Chinese military-affiliated firms and firms researching, developing, or producing sensitive defense and surveillance technologies in conjunction with China’s military-industrial complex and military-civil fusion strategy. In particular, investments from U.S. pension funds, university endowments, and other limited-partner investors will be scrutinized.  

While vowing to preserve “an open investment environment,” this memoranda and its implementation is certain to deter even benign, mutually beneficial investments from China that could otherwise provide a foundation for shared interests and a basis for more cooperative relations. The memoranda also encourages financial investment in U.S. firms where the foreign party does not acquire controlling-, voting-, or corporate governance-interests and will mandates the Securities and Exchange Commission to review auditing standards for firms listed on U.S. exchanges, under the 2020 Holding Foreign Companies Accountable Act. For non-adversarial investments in the United States, the memorandum mandates a “fast-track” investment review process and promises that investments exceeding $1 billion will receive expedited environmental impact reviews. 

Finally, the President instructs the Treasury Secretary to review a 1984 tax treaty with China, which allows multinational corporations to deduct taxes paid to China from their U.S. tax liability. 

Impact: This memorandum expands on Biden-era restrictions on Chinese and other “foreign adversaries’” investments with national security sensitivities, but may also deter non-adversarial investments with mutual benefits.  

Project 2025 references: p. 703-705