You are here
US Treasury Secretary said to favour less-sweeping investment limits for China
[WASHINGTON] The Treasury Department wants President Donald Trump to rely on legislation to tighten scrutiny of Chinese investments in the US instead of an executive move imposing sweeping new limits, according to three people familiar with the matter.
Treasury Secretary Steven Mnuchin has until the end of June to present to the president his department's final recommendations on Chinese investment curbs. Mr Trump directed Mr Mnuchin to draw up the restrictions as part of a probe into China's alleged theft of intellectual property that also allows the imposition of tariffs.
Mr Mnuchin and National Economic Council Director Larry Kudlow attended a meeting on Tuesday between Mr Trump and Republican lawmakers, including Senate Majority Whip John Cornyn and Senator Mike Crapo, chairman of the Senate Banking Committee.
At the gathering, Mr Mnuchin and Mr Kudlow planned to tout legislation drafted by Mr Cornyn as an adequate way to clamp down on Chinese investment, according to the people, who requested anonymity to discuss internal discussions.
Mr Mnuchin's support of legislation restricting Chinese investments that imperil the US's national security is among his highest priorities, a Treasury spokesman said Tuesday. The White House press office didn't immediately respond to a request for comment.
Mr Cornyn's bill to overhaul the Committee on Foreign Investment (CFIUS) in the US, which pre-dates Mr Trump's recent trade crackdown, would expand the scope of foreign investments that are reviewed for national-security concerns. The White House backed the bill earlier this year.
Bills to revamp CFIUS are being pushed through both chambers of Congress. The House proposal goes as far as to single out China among a proposed group of hostile nations whose companies could undergo extra scrutiny for national security risks if they seek to buy stakes in US corporations.
But critics of Mr Mnuchin's approach say the new CFIUS legislation would be a weak substitute for the investment curbs the White House is considering in its trade dispute with China. As Treasury chief, Mr Mnuchin is chair of CFIUS.
Mr Mnuchin and Mr Kudlow are often referred to as the "globalists" in the administration and they have clashed with US Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro, who are more hawkish on China.
Mr Trump late last month announced that tariffs on US$50 billion worth of Chinese imports will be finalised by June 15 and investment restrictions are due by June 30, and that both measures will be implemented shortly after those deadlines. That announcement came after Mr Mnuchin declared the trade war "on hold" and said tariffs would not be imposed for now.
Three rounds of trade talks between the world's two largest economies to date have not yielded progress and Mr Trump's renewed tariff threat was seen as a non-starter for China.