On Saturday, U.S. President Donald Trump approved a memorandum titled “America First Investment Policy,” instructing authorities to deploy all available legal tools to restrict Chinese-linked investments in vital U.S. industries.
According to the memorandum, the U.S. government intends to prohibit individuals and entities with ties to China from investing in key American sectors, including technology, critical infrastructure, healthcare, agriculture, energy, and raw materials. Simultaneously, the policy aims to discourage U.S. investors from financially supporting China’s military-industrial complex.
Furthermore, the memorandum classifies China—including Hong Kong and Macau—as a “foreign adversary,” accusing it of systematically channeling investments into U.S. firms and assets to gain access to advanced technologies, intellectual property, and strategic industry influence. Other nations labeled as adversaries in the document include Cuba, Iran, North Korea, Russia, and Venezuela.
The Trump administration is also considering whether to revoke or suspend the 1984 tax treaty between the two countries, arguing that the agreement—along with other economic factors—has played a role in the decline of U.S. manufacturing while facilitating the modernization of China’s military capabilities.
Additionally, the memorandum explores the possibility of expanding restrictions on American investments in China across industries deemed crucial to national security. These include semiconductors, artificial intelligence (AI), quantum computing, biotechnology, hypersonic technology, aerospace, advanced manufacturing, and directed energy systems, among other sectors aligned with China’s military-civil fusion strategy.
A US official told Reuters, “China is exploiting our capital and ingenuity to fund and modernize their military, intelligence, and security operations, posing direct threats to United States’ security with weapons of mass destruction, cyber warfare, and more.”
“National security is directly tied to economic security,” the memorandum states, emphasizing that while China does not permit U.S. companies to control its critical infrastructure, the United States should similarly prevent Chinese entities from acquiring essential American assets. However, the document does not specify when these measures will take effect.
James Wang, head of China strategy at UBS Investment Bank Research, noted in a report on Monday that while the full extent of the policy’s impact remains uncertain, businesses operating within China’s AI supply chain—including hardware, software, and internet firms—could face significant consequences.
Wang pointed out that past U.S. investment bans have historically led to a 23% decline in affected stocks over a one-year period. “We believe the uncertainty generated by this executive order could create short-term market volatility as investors either take profits or sell off shares as part of their risk management strategies,” he explained.
Over the weekend, China expressed its readiness to counter what it described as a “discriminatory” U.S. executive order restricting Chinese investments in critical American industries, including technology and infrastructure.
China’s Ministry of Commerce strongly criticized the move, calling it “deeply unreasonable.”
“This policy is discriminatory and represents a blatant violation of market principles, severely disrupting normal trade and investment cooperation between businesses in both countries,” the ministry stated on Saturday.
“If implemented, this order will only distort investment flows between China and the U.S. and ultimately fail to serve American interests,” the statement continued. The ministry further emphasized that China would closely monitor developments and take necessary steps to safeguard its economic rights and interests.
