BACKGROUND
The American First Investment Policy (the ‘Memorandum’) issued by President Trump on February 21, 2025, aims to facilitate foreign direct investments in the United States from allies and partners. At the same time, the Memorandum tends to restrict Chinese investments in the United States, prioritizing national security and to “preserve an open investment environment to help ensure that artificial intelligence and other emerging technologies of the future are built, and grown […] in the United States”.[1]
IN DEPTH
The Memorandum directed the creation of an expedited review process for foreign direct investments from trusted allies and partners that have verifiable distance from U.S. foreign adversaries like China and Russia. On May 8, 2025, the Treasury Department announced a pilot program to begin implementing this directive, which includes a “Known Investor” portal to allow investors to proactively provide information to streamline the review process. The stated goal of the program is:
- To facilitate “greater investment from allies and partners” in the United States
- To reduce the amount of time it takes for allied investors to collect and submit information in connection with associated regulatory filings[2].
- To focus on a more balanced reviewing process, allowing transactions to move forward more rapidly and predictably.
- To ease restrictions for businesses involved in critical technology, critical infrastructure, personal data and other sensitive areas, in “proportion to their verifiable distance and interdependence from the predatory investment and technology-acquisition practices” of China and other foreign adversaries.[3]
The policy behind the Memorandum follows prior actions that the Biden Administration, through Executive Order 14105 (Final Rule), had already imposed to regulate foreign direct investments in specific technologies and products in “countries of concern”. The Final Rule had identified “certain transactions” implicating semiconductors and microelectronics for instance, among others.
TAKEAWAYS FOR FOREIGN INVESTORS
- [1] https://www.whitehouse.gov/presidential-actions/2025/02/america-first-investment-policy/
- [2] https://www.cov.com/en/news-and-insights/insights/2025/06/reflections-on-cfius-and-us-national-security-and-foreign-investment-regulation-in-the-first-four-months-of-the-trump-administration
- [3] https://www.clearytradewatch.com/2025/02/president-trump-issues-america-first-investment-policy-confirms-u-s-openness-to-foreign-investment-from-allies-and-partners-calls-for-enhanced-restrictions-on-investments-from-and/
But what should foreign investors expect under the new scrutiny of the Memorandum? Investors from allied countries should expect faster processing for investments but significantly increased scrutiny for those with ties to China or other adversaries, particularly in critical sectors like technology, energy, and infrastructure. In addition, passive investments (non-controlling stakes with no voting or governance rights) are still welcome, but the policy creates a more complex landscape, with potential for new restrictions on certain types of investments and new rules governing outbound investments from the United States. A few takeaways for investors who look at the United States as a potential market for their expansion should consider the following:
- Anticipate more complex compliance requirements and a need to demonstrate a “verifiable distance and independence” from foreign adversaries to navigate the new landscape and avoid potential restrictions.
- Need for Professional Consultancy: given the complexity and evolving nature of the policy, investors should consult professional advisors to ensure their investment strategies align with the new rules and potential future regulations.
CONCLUSIONS
The Memorandum has a clear goal to welcome investment from allies while restricting that from adversaries like China. Nonetheless, its implementation is less clear, and it is expected to evolve. The policy sets direction but relies on future agency actions (Treasury, CFIUS) for precise enforcement, creating both potential opportunities (for allies) and challenges (for investors in restricted sectors).
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