US investment controls will survive Trump

Significance The Trump administration has expanded powers to review inbound investments on national security grounds, in its campaign to deny China access to critical US technologies. The Committee on Foreign Investment in the United States (CFIUS) is playing a key role, as the administration seeks technological decoupling from China. Impacts CFIUS’s activity will evolve as the administration’s concepts of national security and global economic order shift. Corporations must be proactive ahead of transactions, to consider potential CFIUS implications. The United States will have to offset the loss of foreign investment with domestic R&D spending. A Biden administration would not roll back CFIUS but could redefine ‘national security’ and mitigation measures.

Subject Chinese investment in the United States. Significance The Foreign Investment Risk Review Modernization Act (FIRRMA) enacted on August 13 expands the remit of the Committee on Foreign Investment in the United States (CFIUS), which reviews incoming foreign investment deals for possible national security implications. China is the implicit target. Since its peak of 46 billion dollars in 2016, Chinese direct investment in the United States has steadily declined, falling to 29 billion dollars in 2017 and dropping another 90% year-on-year in the first half of 2018. Impacts Uncertainty regarding new US regulations will hold some Chinese investors back from entering the market. Chinese businesses will face greater pressure from US policymakers and regulators to clarify their relationship with the Communist Party. Chinese investments in ICT, semiconductors and other advanced technologies will come under sustained scrutiny from US regulators. Chinese greenfield investments might increase as investors seek ways around tariffs and the Trump administration seeks to create jobs.


Subject Government intervention in foreign inward and outward investments and mergers. Significance The Trump administration is increasingly moving to control undesired foreign investments, as the March 12 presidential order blocking overseas-based Broadcom from merging with US-based Qualcomm showed. President Donald Trump was working on advice from the Committee on Foreign Investment in the United States (CFIUS). Since 1990, there have been only five cases where presidents have blocked mergers; two of these have been under Trump since his inauguration in January 2017. Impacts Foreign firms will face constraints on accessing US intellectual property and tech patents. Trump will impose new visa requirements for Chinese nationals working and studying in the United States. US vetoes of foreign investment and mergers could see other countries respond in the same way. The Broadcom-Qualcomm veto should help the US semiconductors industry maintain a global role in 5G technology. Foreign firms may sidestep the CFIUS by incorporating in the United States, as Broadcom hopes to do next month.


2017 ◽  
Vol 111 (4) ◽  
pp. 1027-1035

In June 2017, President Donald Trump announced a plan to roll back various steps taken by his predecessor toward normalizing relations between the United States and Cuba. A senior official for the administration announced the plan in a White House press briefing:The President vowed to reverse the Obama administration policies toward Cuba that have enriched the Cuban military regime and increased the repression on the island. It is a promise that President Trump made, and it's a promise that President Trump is keeping.With this is a readjustment of the United States policy towards Cuba. And you will see that, going forward, the new policy under the Trump administration, will empower the Cuban people. To reiterate, the new policy going forward does not target the Cuban people, but it does target the repressive members of the Cuban military government.


Significance The outcome comes as little surprise, given the repressive tactics used by the Ortega administration in the run-up to the vote, which included the disqualification or imprisonment of numerous opposition candidates. The United States and other international actors are now poised to put increased pressure on the re-elected government. Impacts The prospect of extended sanctions will act as a further disincentive to foreign investment. Ortega’s efforts to boost regional support through increased alignment with Honduras may lead to greater bilateral trade. More undocumented Nicaraguan migration looks inevitable, whether due to continuing political repression or worsening economic hardship.


Asian Survey ◽  
2018 ◽  
Vol 58 (1) ◽  
pp. 10-20
Author(s):  
Robert Sutter

Early Trump administration initiatives upset regional stability, complicating the foreign policies of Asian partners and opponents alike. Subsequent pragmatic summitry eased regional anxiety and clarified the new government’s security and political objectives. The administration’s national security strategy, released in December, provided a well-integrated security, economic, and diplomatic strategy for Asia and the rest of the world.


Subject The US intelligence community in a year after purported reforms. Significance On December 29, an agreement between the United States, Japan and South Korea to share intelligence on North Korea went into effect. This ended a year in which the US intelligence community was the subject of broad domestic public scrutiny in the light of continued fallout from former National Security Agency (NSA) contractor Edward Snowden's leaks to a Senate report on the CIA's use of torture. The White House's support for reforms has been watched by tech and telecoms businesses that have lost considerable revenue from reputational damage as a result of the growing awareness of requirements on them of US intelligence activities. Impacts The Obama administration will rely on the US intelligence community as its main counterterrorist instrument. A Republican Congress will be less likely to support intelligence reforms, though only marginally so. There is no indication that the balance of power on intelligence issues between the executive and legislative branches has shifted.


Subject US relations with North and South Korea under the incoming Trump administration. Significance The period of transition to Donald Trump's presidency in the United States has displayed neglect and misunderstanding of Korean peninsula affairs, adding to risks for the region as it approaches a period of significant strategic challenge. Impacts Until Trump's team enunciates policy on the Koreas, responses to events will be unprepared and reactive. Trump's policy will influence presidential elections in South Korea, where left-of-centre candidates question the value of the US alliance. The Trump administration’s policy and communication via Twitter heightens risk of misunderstanding within the region.


Significance The deal reached between Iran and the P5+1 negotiating group (UN Security Council permanent members plus Germany) on July 14 promises to end most sanctions on the country, in return for suspension and monitoring of its nuclear programme. If ratified by all parties, it will create opportunities for an expansion of Iran's gas production and exports. Iran is the holder of the world's largest gas reserves, according to BP estimates. It is also the third-largest producer (after the United States and Russia, and probably having overtaken Qatar during 2015), and the fourth-largest consumer. Impacts Iran could increase gas exports by advancing projects stalled by sanctions, although most of these will take some years to come to fruition. Iran would seek to attract foreign investment into its gas industry to increase production and exports in the longer term. If this occurs, Iran will compete with other gas exporters, particularly Russia, into the 2020s.


Subject Turkish objectives in Syria. Significance US Senator Lindsey Graham’s visit to Ankara on January 18 passed off in an exceptionally cordial atmosphere, completely unlike the frigid reception for President Donald Trump’s National Security Advisor John Bolton four days earlier. Graham and Turkish President Recep Tayyip Erdogan talked for two-and-a-half hours and said they had reached agreement over Syria. Impacts The risk is growing of a dispute between the Syrian Kurds and the United States. Relations between Turkey and Russia are strained; Russia and the United States will combine to protect Manbij. Key northern Syrian routes through Idlib may be blocked and HTS will put up tough resistance if attacked.


Subject China's options for retaliating against US firms during trade tensions. Significance US President Donald Trump tweeted yesterday that he is working with China's President Xi Jinping to get China's telecoms giant, ZTE, "back in business, fast" -- even though it was penal US sanctions that forced the company to announce last week that it was stopping operations. The Trump administration is divided on whether its objective in threatening imports tariffs on Chinese goods worth 50 billion dollars, effective May 22, is to strike a deal to cut China's trade surplus with the United States or to change China's industrial practices. Impacts Compliance costs will rise even if trade tensions subside. Investors in industries that China sees as strategic (eg, semiconductors and integrated circuits) may face unwritten screening rules. Investors in automobile, aircraft and shipping manufacturing and finance may find new opportunities to enter the market.


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