America First Investment Policy increases restrictions on FDI from and to "foreign adversaries"

21 Feb 2025

On 21 February 2025, the Government of the United States of America published The America First Investment Policy, which aims to encourage investment from allies by facilitating investments while also increasing restrictions on "foreign adversaries" to bolster economic and national security. The facilitation measures under the policy are detailed in the IPM database: https://investmentpolicy.unctad.org/investment-policy-monitor/measures/4985/united-states-of-america-america-first-investment-policy-aims-to-facilitate-investment-from-allies-and-partners-

Inward FDI:

To safeguard critical sectors — such as technology, infrastructure, healthcare, agriculture, energy, and raw materials — the policy directs the use of legal instruments, including the Committee on Foreign Investment in the United States (CFIUS), to limit investments from nations deemed foreign adversaries, notably China. Compared to the previous regime, the policy proposes expanding CFIUS's jurisdiction to include "greenfield" investments—especially in sensitive sectors like artificial intelligence. Restrictions and tighter screening on inward foreign direct investment (FDI).

Outward FDI: • The policy proposes expanding restrictions under the outward FDI screening mechanism which entered into force in January 2025 to the following sectors: biotechnology, hypersonics, aerospace, advanced manufacturing, and directed energy. • Covered sectors will be reviewed and updated regularly, including by the Office of Science and Technology Policy. As part of the review, the policy calls for applying restrictions on new 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 United States persons to invest in foreign adversaries, the policy states that the administration will review whether to suspend or terminate the 1984 United States-The People’s Republic of China Income Tax Convention.

The implementation of the “America First Investment Policy” will proceed through a combination of agency rulemaking, potential legislative actions, and interagency coordination. The exact timelines and outcomes will evolve as these processes unfold.

For the purposes of the policy, the term "foreign adversaries" includes the People's Republic of China, including the Hong Kong Special Administrative Region and the Macao Special Administrative Region; the Republic of Cuba; the Islamic Republic of Iran; the Democratic People’s Republic of Korea; the Russian Federation; and the Bolivarian Republic of Venezuela.

Nature of measure:

• Entry restriction
• Treatment and operation

Type:

• Entry and establishment (Approval and admission - screening)

Industry:

• Primary (Agriculture, forestry and fishing, Mining and quarrying)
• Manufacturing (Manufacture of computer, electronic and optical products, and electrical equipment)
• Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Transportation and storage, Publishing, audiovisual and broadcasting activities, Telecommunications, Computer programming, consultancy and related activities, Scientific research and development, Other professional, scientific and technical activities, Public administration and defence; compulsory social security, Human health activities)

Sources:

• The White house, America First Investment Policy, https://www.whitehouse.gov/presidential-actions/2025/02/america-first-investment-policy/, 21 Feb 2025