President Trump’s America First Investment Policy (AFIP) memorandum, signed on February 21^st, represents a significant shift in U.S. foreign investment review processes, establishing a 2-track system that expedites reviews for friends and sharpens scrutiny of investments from targeted “foreign adversaries,” namely China, Hong Kong, Macau, Cuba, Iran, North Korea, Russia, and Venezuela.

The policy makes some significant reforms to CFIUS operations, including a “fast-track” process for review of investments from allied nations and enhanced jurisdiction over the previously exempt “greenfield” investments. Allied investors will be assured of fewer regulatory hurdles, like expedited environmental reviews for investments of $1 billion or more. By contrast, China and other “designated foreign adversaries” will face enhanced screening and potential limits in sensitive technologies like artificial intelligence (AI), semiconductors, biotechnology, hypersonics, aerospace, and advanced manufacturing.

The policy also aims to restructure CFIUS mitigation agreements from “open-ended” to those with “concrete actions” and timelines. “While requesting an open investment policy, [the memorandum] reiterates the Trump administration’s view that economic security is national security and the desire to use all of the tools at its disposal to protect American competitive edges in advanced technologies,” said legal experts at Akin Gump.

Implementation will require both Congressional and regulatory action, particularly for expanding CFIUS jurisdiction over greenfield investments. The Treasury Department is considering expanding outbound investment controls to other sectors like biotechnology, hypersonics, aerospace, and directed energy, as well as other types of transactions, including publicly traded securities from pension funds and university endowments. The Administration also intimated that it could use sanctions under The International Emergency Economic Powers Act (IEEPA) to dissuade U.S. individuals from investing in China’s military-industrial sector, a further hardening of investment policy toward foreign rivals up to spring 2025.

Critics argue that such measures may discourage foreign investment in the U.S. by bringing more regulatory complexity and national security concerns for foreign investors. The policy emphasis on restricting investments from adversarial nations could lower the level of foreign investment, which may have adverse effects on U.S. economic growth and job creation. As argued by experts, the policy’s double-pronged approach could lead to confusion for investors, making America less attractive compared to other foreign markets with easier investment processes.

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