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On Friday, February 21, 2025, President Trump issued a National Security Presidential Memorandum (“NSPM”) titled “America First Investment Policy” which directed multiple federal agencies to take action to further restrict foreign adversaries’ ability to invest in sensitive United States businesses and to further restrict United States outbound investments into China. The Trump Administration also issued a Fact Sheet to accompany the NSPM.

Many of the NSPM’s objectives relate to the Committee on Foreign Investment in the United States (“CFIUS”), which uses statutory powers under Section 721 of the Defense Production Act of 1950 (“DPA”) to block foreign acquisition of or investments in U.S. businesses when CFIUS determines that such transactions threaten U.S. national security. The NSPM’s main focus was on restricting Chinese investment into sensitive U.S. businesses, but its policies would also generally apply equally to other “foreign adversaries” which the NSPM defined to also include “the Hong Kong Special Administrative Region and the Macau Special Administrative Region; the Republic of Cuba; the Islamic Republic of Iran; the Democratic People’s Republic of Korea; the Russian Federation; and the regime of Venezuelan politician Nicolás Maduro.”

The NSPM’s proposed policy changes include (but are not limited to):

  • The creation of a new “fast-track” process which will “facilitate greater investment from specified allied and partner sources in United States business involved with United States advanced technology and other important areas”. However, in order to qualify for this “fast-track” treatment, foreign investors will be required to accept “security provisions” which will include requirements “that the specified foreign investors avoid partnering with United States foreign adversaries.”
  • A commitment to “expedite environmental reviews” for any investment in the United States of over $1 billion.
  • A commitment to “protect United States farmland.” It is unclear exactly how the Trump Administration intends to accomplish this goal, but they could presumably do this by adding farmland to the category of protected “covered real estate” under the Regulations Pertaining to Certain Transactions by Foreign Persons Involving Real Estate in the United States (31 CFR § 800.101, et seq, the “Part 800 Real Estate Regulations”). 
  • Action to “strengthen CFIUS authority over ‘greenfield’ investments,” which are currently exempt from several restrictions imposed under the Regulations Pertaining to Certain Investments in the United States by Foreign Persons (31 CFR § 800.101, et seq, the “Part 801 Foreign Investment Regulations”).
  • Restricting foreign adversary access to artificial intelligence and other sensitive technologies and generally expanding the types of “emerging and foundational technologies” which are subject to potential CFIUS restrictions.
  • Ceasing “the use of overly bureaucratic, complex, and open-ended ‘mitigation’ agreements for United States investment from foreign adversary countries”. The NSPM stated the Trump Administration’s viewpoint that “In general, mitigation agreements should consist of concrete actions that companies can complete within a specific time, rather than perpetual and expensive compliance obligations.”

The NSPM also stated that the Trump Administration plans to “use all necessary legal instruments to further deter United States persons from investing in the PRC’s military-industrial sector.” The Biden Administration had previously issued Executive Order 14105 and Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern (31 CFR § 850.101, et seq, the “Outbound Investment Security Regulations”), which imposed restrictions on U.S. persons’ ability to make certain investments in “Semiconductors and microelectronics”, “Quantum information technologies” and “Certain artificial intelligence (AI) systems” which are located in or otherwise affiliated with the PRC, Special Administrative Region of Hong Kong and Special Administrative Region of Macau. The NSPM notes that the Trump Administration is currently reviewing Executive Order 14105 “to examine whether it includes sufficient controls to address national security threats” and considering “new or expanded restrictions on United States outbound investment in the PRC in sectors such as semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced manufacturing, directed energy, and other areas implicated by the PRC’s national Military-Civil Fusion strategy.” 

As part of this review, the Trump Administration “will consider applying restrictions on investment types including private equity, venture capital, greenfield investments, corporate expansions, and investments in publicly traded securities, from sources including pension funds, university endowments, and other limited-partner investors.” To further reduce incentives for U.S. persons to invest in China, The NSPM also commits to “review whether to suspend or terminate the 1984 United States-The People’s Republic of China Income Tax Convention” and the undertaking by the U.S. to accord unconditional Most Favored Nation treatment to goods and services of the PRC.

Notably, the NSPM does not set any required timeline for the Trump Administration to complete its reviews or to enact the proposed policy changes. It is also unclear whether some of the Trump Administration’s proposed policy changes can be enacted through executive-branch action alone or whether they might require cooperation from Congress in order to amend the DPA or other statutes.

Husch Blackwell attorneys are continuing to monitor developments closely and will provide updates as new developments occur. If you have questions regarding the NSPM or any of its forecasted policy changes then please contact Grant Leach, Fang Shen or your Husch Blackwell attorney.