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Legislation gives the United States the ability to restrict investments in national security sectors in countries of concern, including China
U.S. Senator Bob Casey (D-PA) secured key provisions from his legislation to prohibit U.S. investments in critical national security technologies in countries of concern in the must-pass government spending bill.
For the first time ever, this legislation would give the U.S. the ability to restrict the Chinese government from gaining access to American technology and know-how in national security sectors. The industries included under the bill are: advanced semiconductors and microelectronics, artificial intelligence, quantum information science and technology, and hypersonics. The Senate is expected to vote on the government spending bill later this week.
“When we allow American businesses to invest in Chinese sectors like AI and semiconductors, we’re putting our national and economic security at risk,” said Casey. “This is a key step to restrict American national security technology and know-how from getting into the hands of our adversaries. In finally passing this law, Congress is taking our economic future into our own hands and giving the U.S. the ability to stop China from eating our lunch.”
Senator Casey is one of the leading voices in Congress sounding the alarm on the risks posed by U.S. national security investments in China. He has led bipartisan legislation to give the U.S. insight into investments in national security sectors going to countries of concern, including China. His Outbound Investment Transparency Act, cosponsored by U.S. Senator John Cornyn (R-TX), passed the Senate as an amendment to the 2023 National Defense Authorization Act (NDAA) by a vote of 91-6, but House Republican leadership ultimately dropped Casey’s bill from the final legislation.
In September 2024, Senator Casey introduced comprehensive legislation to strengthen American competitiveness in the global economy, crack down on trade cheating, and protect against economic and cybersecurity threats from China. The Combat Chinese Economic Aggression Act would strengthen U.S. manufacturing and technology by pushing back against China and other countries of concern that seek to steal trade secrets and exert influence over American defense, manufacturing, infrastructure, telecommunications, and energy industries.
At the same time, Casey pushed the Biden Administration to take executive action to screen outbound investments in critical sectors in countries of concern. The Department of Treasury announced the proposed rule in June and finalized it in October 2024 at Casey’s urging. The executive order declared that certain U.S. company investments in critical technologies amounts to a national emergency. The final rules established a new program to prohibit certain investments and the transfer of other tangible benefits in specific types of advanced semiconductor, quantum, and AI technologies. These rules will impose penalties on companies that knowingly fail to comply and continue to seek ways to transfer American technology the Chinese Communist Party
In addition to prohibiting U.S. investments in certain national security technologies in countries of concern, this legislation authorizes the U.S. government to have more visibility into investments and emerging risks to U.S. security and competitiveness. For other national security sectors not subject to a strict prohibition, the bill authorizes the U.S. government to require investors to notify the U.S. Department of Treasury when investing in certain technologies.
