SAN FRANCISCO, CALIFORNIA — While the Trump administration is putting tariffs on Chinese imports, another battle has been brewing about whether the United States should block Chinese investments in some U.S. companies that work in artificial intelligence (AI), robotics and other key technology.
Some of these technologies have U.S. national security implications, argues the Department of Defense in a report on growing Chinese ties to U.S. firms. Lawmakers in Washington are considering expanding a Treasury Department review process that looks at investments from foreign entities.
“I assure you that the threat China poses is real and that the dangers we worry about are already taking effect,” said Sen. John Cornyn, a Texan Republican, who is sponsoring the Foreign Investment Risk Review Modernization Act, the bill that would strengthen the review. “Our inaction can only have negative consequences, and we need to aim to prevent any future negative consequences to our country.”
Limiting Chinese investments has to be done thoughtfully, said Jeff Moon, an international trade and government affairs consultant and a former assistant U.S. trade representative.
“The biggest problem I see is just vagueness when we talk about Chinese investment,” Moon said. “Are we talking about any Chinese national that’s dropping a penny into the American economy?”
View from Silicon Valley
In Silicon Valley, there is some relief the Trump administration appears to have backed away from a plan to block investment into AI or other technologies in the United States by a company with more than 25 percent Chinese ownership.
While the national security concerns are legitimate, tech firms and investors don’t want to see “policies that take some kind of a sledgehammer approach to investment, which by and large from China here has been beneficial,” said Sean Randolph, senior director of the Bay Area Council Economic Institute.