Insights

On February 21, 2025, the Trump administration published its “America First Investment Policy” memorandum. Among other items, the Policy calls for the United States to restrict China-affiliated persons from investing in strategic sectors of the U.S economy, create an expedited “fast track” process to facilitate investment from specific allied partners, and establish new rules to prevent U.S. companies from investing in industries that advance China’s Military-Civil Fusion strategy. For a more detailed description of the policy, see our previous article, America First Investment Policy Restricts Adversaries and Welcomes Investment from Allies.

Many of the requirements of the America First Investment Policy are already part of the U.S. foreign investment regimes regulations or policy, including those of the Committee on Foreign Investment in the United States (CFIUS). For example, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and implementing regulations created the CFIUS declaration, a shorter form filing with a 30-day review timeframe, and the “excepted investor” concept, removing certain investments by investors from strategic ally countries from CFIUS jurisdiction. And it has long been known among CFIUS practitioners that the Committee applies greater scrutiny to transactions involving Chinese parties. Additionally, beginning on January 2, 2025, Department of the Treasury rules related to outbound investment in China became effective.

Since the publication of the Policy, the Trump administration has issued an Executive Order (EO) related to investment in the United States, and lawmakers have proposed legislation or advocated for specific policy related to the foreign investment restrictions, both at the federal and state level. Below are a few of these relevant updates.

Investment Accelerator

On March 31, 2025, President Trump signed an EO “Establishing the United States Investment Accelerator.” The EO requires within 30 days the Department of Commerce establish a United States Investment Accelerator, which will “facilitate and accelerate investments above $1 billion in the United States.” The EO further claims that the Investment Accelerator will assist both foreign and domestic investors in navigating the U.S. regulatory process efficiently, reduce regulatory burdens, facilitate research collaborations with national labs, and work with state governments to further reduce regulatory burdens.

The EO’s accompanying Fact Sheet further explains that “slow, complex, and burdensome regulations make domestic and foreign investment harder than necessary,” and the Investment Accelerator is needed to “cut through red tape” that slows or prevents investment into the United States. It is not yet clear how the Investment Accelerator will impact CFIUS and the numerous regulations potentially implicated by foreign investment in the United States.

The Investment Accelerator EO also places the CHIPS Program Office under the responsibility of the U.S. Investment Accelerator within the Department of Commerce. After the passage of the CHIPS and Science Act in 2022, the Biden administration established the CHIPS Program Office to oversee the allocation of funds and coordination of efforts to rebuild the domestic semiconductor ecosystem.

Foreign Investment Guardrails to Help Thwart (FIGHT) China Act

On March 13, Senator John Cornyn (R-TX), who sponsored the FIRRMA legislation, introduced the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act. If enacted, this bipartisan legislation would permit the Secretary of the Treasury to prohibit U.S. investments in certain technologies in China, including certain advanced integrated circuits, AI models, quantum computers, materials used in hypersonic systems, and other military technologies.

This is not the first time Congress has attempted to codify an outbound investment regime. Senator Cornyn unsuccessfully attempted to attach the Outbound Investment Transparency Act to the 2024 National Defense Authorization Act. Also, in November 2023, the bipartisan Preventing Adversaries from Developing Critical Capabilities Act was introduced to the House of Representatives.

How the FIGHT China Act will interact with the current Department of the Treasury rules related to outbound investment and the America First Investment Policy goals remains to be seen. For more information about outbound investment restrictions, see our previous newsletter article for the State Bar of Texas International Law Section, U.S. Issues Unprecedented Order Restricting Investment in China.¹

Senators Urge Collaboration with Latin America for CFIUS-like Mechanisms

On March 12, 2025, Senator Cornyn and Senator Michael Bennet (D-CO) wrote a letter urging Treasury Secretary Scott Bessent to direct CFIUS “to strengthen engagement with Latin American and Caribbean countries to help them develop mechanisms like CFIUS to review sensitive foreign investments.” The letter references the requirement in FIRRMA for CFIUS to establish a process for cooperation with allies related to investment screening. The catalyst for the Senators’ letter is China’s increasing foothold in strategic sectors in Latin American and Caribbean countries geographically close to the United States.

The letter serves as a reminder that the United States is not the only country with enhanced screening of foreign investment into sensitive technologies and references other countries that have strengthened or created such mechanisms, including Australia, Japan, India, Israel, Norway, South Korea, and Taiwan. The letter also mentions the 2023 Memorandum of Intent between the U.S. and Mexico related to foreign investment reviews.

Proposed Texas Law Seeks to Establish a State-Level CFIUS

On March 10, a group of state senators in the Texas Senate proposed a bill to create a Texas Committee on Foreign Investment (TCFI) comprised of various state agencies and tasked with reviewing “covered transactions,” which include investments affecting “critical infrastructure,” agricultural land, sensitive personal data, or a strategic asset or industry in the state. Lawmakers in the Texas House of Representatives introduced a companion bill on March 13, 2024.

The TCFI is modeled after CFIUS, and parties entering into a “covered transaction” must notify the state attorney general of the transaction 90 days before closing. “Critical infrastructure” is broadly defined to even include “commercial facilities” and “financial services,” in addition to communications, energy, government, and healthcare infrastructure, among other categories. The proposed legislation would include a minimum value threshold or minimum ownership percentage for TCFI jurisdiction. If enacted, penalties for violations would be up to $50,000 (much lower than the CFIUS maximum penalty of $5 million per violation), or the state attorney general may seek to enjoin a party from violating the law, including by seeking divestment or a mitigation agreement.

If the law is enacted, the TCFI would be the first CFIUS-like body at the state level, but others may follow. M&A practitioners and transaction parties should continue to conduct due diligence related to CFIUS jurisdiction and mandatory federal filing requirements. But there is a possibility that such due diligence in the future would need to extend to the state level.

Since the beginning of the second Trump administration, there has been a flurry of activity in several international trade and national security areas, including inbound and outbound foreign investment regimes. The attorneys at Torres Trade Law continue to monitor the above potential changes in investment review regimes. If you have any questions about the above, or CFIUS or outbound investment reviews generally, please do not hesitate to contact Torres Trade Law.