Bye Bye China: Trump’s New Foreign Investment Strategy

Trump Will Move Production and Investments Back to the U.S.

President Trump’s February 21 National Security Presidential Memorandum (NSPM) marks a new era in U.S. foreign investment strategy. The NSPM is a statement of Trump’s intention to encourage foreign investments while also protecting Americans and U.S. investors from what amounts to unrestricted warfare by the People’s Republic of China (PRC). As such, national security takes center stage in the President’s new policy.

The U.S. government will scrutinize foreign investments, particularly those from adversarial nations like China and Russia to prevent threats to critical industries, infrastructure, or sensitive technologies. This policy underscores the need to restrict foreign entities from gaining undue influence over industries vital to the country's defense capabilities, energy security, or technological supremacy.

Notably, the policy also directly challenges agreements set in motion by Vice President Biden during the Obama administration. In May 2013 Biden put in place a memorandum of understanding (MOU) with the Chinese government, an agreement that was disadvantageous to U.S. interests.

Instead, Biden brokered a sweetheart deal favoring the PRC, whereby China was essentially allowed to “put their stocks and bonds into our capital markets without having to comply with our laws or regulations,” according to Frank Gaffney, Vice Chairman of the Committee on the Present Danger: China (CPDC) and former Acting Assistant Secretary of Defense.

Gaffney has long voiced concerns about China’s ability to operate in U.S. markets with impunity. In May 2020, during Trump’s first term, Gaffney and other foreign policy experts sent a letter to the Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) warning of China’s “intentional thwarting of U.S. investor protections.” The letter highlights how Biden’s agreement with China prevented the SEC and PCAOB from safeguarding U.S. investors. For the most part, China has been allowed to bypass key compliance measures that are mandatory for SEC-registered American companies.

In Monday’s interview on Bannon’s War Room, Gaffney praised President Trump’s National Security Presidential memorandum. He asserted the new policy marks a crucial step toward curbing the Chinese Communist Party’s (CCP) ability to invest in U.S. markets, especially in companies with military ties or involvement in China's "military-civil fusion" strategy. He stressed that limiting China's financial influence is vital to weakening its military and global power.

Gaffney also drew attention to the broader implications of the policy, including restrictions on Chinese investments in U.S. farmland and businesses. He supports Trump’s assertion of the need for reciprocity, and agrees that China is not reciprocal in allowing foreign ownership of shares in Chinese companies.

Foreign Investment Yes, but Not in China

Trump’s NSPM provides clear directives to restrict Chinese investment in key strategic U.S. sectors, prioritizing national security first and foremost. At the same time, the directive also encourages any foreign investments that provide “economic growth, job creation and innovation” that support “American jobs and innovators.”

Under Trump, the U.S. government recognizes that foreign investment can fuel technological advancements, create employment opportunities, and boost productivity in key sectors. However, his policy seeks to balance these benefits with careful oversight of foreign ownership in strategic industries, while tightening controls over adversarial countries like China and Russia to mitigate risk.

To encourage the flow of foreign capital into the U.S., Trump introduces a "fast-track" process for investments from trusted allies while tightening control over adversarial investments. Key actions include protecting sensitive U.S. industries, reducing risks posed by foreign exploitation of U.S. assets, and supporting transparency in investment processes.

Transparency is a cornerstone of the policy, with the U.S. government committing to making investment processes more transparent and accountable. This includes stricter disclosure requirements for foreign investors, particularly those involved in strategic sectors. The goal is to ensure the public, industry stakeholders, and lawmakers are fully informed about foreign investments' potential impacts on U.S. national security and economic well-being.

According to the memorandum, the Committee on Foreign Investment (CFIUS) will oversee the restriction of Chinese investments in strategic U.S. sectors, including “technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and others.” NSPM will also protect American farmland and real estate near “sensitive facilities,” a problem that has been recognized as a significant threat to the homeland by Governor DeSantis and others.

Foreign entities and individuals currently own approximately 43 million acres of U.S. agricultural land, which accounts for nearly 2% of all land in the country, as stated in the memorandum. Of this, China owns over 350,000 acres of farmland spread across 27 states, representing a 30% increase since 2019, according to Rep. Mike Collins (R-GA). To highlight China’s significant financial influence, Collins pointed out in a July 2023 press release that "China holds $870 billion in U.S. Treasuries, which help finance our national debt." He also noted China’s extensive stake in major American assets, including significant portions of the “Chicago Stock Exchange, AMC movie theaters, General Electric’s appliance division, General Motors, and Smithfield Foods, among others.”

Trump believes China is actively exploiting U.S. assets and capital to reinforce and augment its military and intelligence capabilities. It is all too common for bad actors like China to invade key governmental agencies and sectors. In December 2024, Chinese state-sponsored hackers broke into the U.S. Treasury Department’s workstations including the CFIUS office, “the entity responsible for reviewing foreign investments for national security risks,” according to the memorandum. The breach was classified as a "major incident" and lawmakers were notified via letter of the incident. The hackers used a third-party software provider, BeyondTrust, allegedly also hacking into 16 other companies in the same breach.

Trump Policy Already Being Executed Domestically: Apple Takes the Lead

In a strategic move that aligns with Trump’s capital investment strategy, Apple announced plans to invest over $500 billion in the U.S. over the next four years, aiming to create 20,000 new jobs and bolster American innovation. Notably, Apple’s CEO, Tim Cook, met with President Trump at the White House on February 20, most likely to discuss expansion in the U.S.

Apple intends to expand its presence in key swing states including Michigan, Arizona, Nevada, and North Carolina with additional facilities in Iowa, Oregon, Washington, and California. The expansion will also include building a new manufacturing facility in Houston, Texas, to produce servers for artificial intelligence applications, and expanding data centers across various states. Apple will also establish an academy in Detroit to support skills development. Apple’s move arguably paves the way for other U.S. companies to follow suit.

Apple’s investment reflects the Trump administration’s push to strengthen domestic manufacturing and reduce reliance on manufacturing and production overseas. In response to tariffs on Chinese imports, Apple is likely reassessing its supply chain strategy to align with new U.S. policies.

Apple’s investment builds on the company’s broader strategy to enhance its U.S. presence, which includes previous commitments such as a $350 billion investment plan announced in 2018 to be invested over 5 years and a subsequent pledge of $430 billion during President Biden’s term. Apple is reportedly the U.S.’s largest taxpayer, reinforcing its crucial role in the U.S. economy.