US Treasury considers emergency powers on Chinese investments: official

The U.S. Treasury is considering ways to restrict sensitive Chinese investments in the United States by invoking an emergency powers law and bringing forward some security review reforms for corporate acquisitions, a senior Treasury official said Thursday.

Heath Tarbert, Assistant Secretary for International Markets and Investment, told an Institute of International Finance Forum that those efforts were part of the Trump administration’s “Section 301” intellectual property remedies, which include China-specific investment restrictions.

Asked about reports that the Treasury may bring forward parts of a bill to modernize Committee on Foreign Investment in the United States security reviews or use the International Emergency Economic Powers Act, Tarbert said a special Treasury office devoted to the China restrictions was considering both avenues.

“We have separate offices in Treasury which are considering those two issues distinctly,” Tarbert said.

The office to modernize CFIUS is separate from the office working on China investment restrictions.

But he said the Treasury was committed to passing the CFIUS legislation, known as the Foreign Investment Risk Review Modernization Act (FIRRMA) through Congress.

“We think CFIUS modernization is something that needs to be done via statute and should be done in a thoughtful way,” he said.

The 1977 emergency economic powers law would give President Donald Trump broad authority to impose tighter restrictions on Chinese investment in sensitive sectors, by declaring a national emergency related to such investments.

The law was widely used after the 9/11 attacks in 2001 to block the assets of terrorist organizations.