Global Investment in American Jobs Act of 2025

— 703 — Department of the Treasury l The U.S. should also examine increasing or decreasing its ownership levels in these institutions in order to achieve maximum leverage. CHINA AND OTHER GEOPOLITICAL THREATS Committee on Foreign Investment in the United States. The interagency Committee on Foreign Investment in the United States should realign its priorities to meet the United States’ current foreign policy threats, especially from China. On October 20, 2022, the Treasury Department, which chairs CFIUS, adopted the first-ever CFIUS Enforcement and Penalty Guidelines50 on the committee’s national security risk mitigation requirements. However, there are no clear rules that guide CFIUS on mitigation monitoring, nor is there a published penalty sched- ule to standardize accountability when CFIUS pursues a civil money penalty for violators. In addition, Treasury—as chair of the committee—runs an opaque pro- cess that biases committee procedure toward corporate interests and away from national security interests. Finally, the committee’s jurisdiction does not extend over greenfield investments that Chinese state-owned enterprises have historically pursued in the United States, which leaves America vulnerable to an instrument of Chinese economic statecraft. Given these issues, the next steps for CFIUS should be to develop a more coherent—and transparent—mitigation monitoring program to complement the enforcement guidelines, give CFIUS agencies in charge of national security con- cerns an equal voice at the table, and petition Congress to amend the law to cover Chinese greenfield investments. CFIUS should publish a penalty schedule for violations of CFIUS reporting and mitigation requirements. Publishing a penalty schedule for CFIUS violations will reduce the discretion of the committee to waive penalties or impose mere “wrist slap” costs on violators of the law. Additionally, a standardized penalty schedule would likely increase the deterrence of CFIUS enforcement by reducing the per- ception among parties to covered transactions that they can avoid enforcement by the committee or secure special exceptions based on appeals to the commit- tee’s discretion. As a legal matter—and in application by CFIUS—mitigation monitoring has developed as the Wild West. There are no clear rules that guide the entire com- mittee on mitigation monitoring, nor is there the same level of oversight or accountability within and among the agencies as applies when CFIUS reviews a transaction or when it pursues a civil money penalty. Indeed, it is a credit to transaction parties and the professionalism of the governmental officials and con- tractors who conduct mitigation monitoring on behalf of the government that, by and large, mitigation monitoring has worked adequately during the last several decades. But dependency on the personality and capabilities of individuals creates unnecessary risk both for CFIUS and for transaction parties. — 704 — Mandate for Leadership: The Conservative Promise Congress should make the Department of Defense (DOD) a CFIUS co-chair with the Department of Treasury. Making DOD an official CFIUS co-chair along with Treasury will establish a balanced committee process by elevating national security interests to an equal stature. The committee is currently imbalanced toward the interests of corporate America because Treasury is the sole chair of CFIUS and, in practice, runs a process that is not fully transparent and which biases it from the national security interests represented by DOD and the Intelligence Community (IC). For example, Treasury representatives will consult with the Commerce Depart- ment and the United States Trade Representative—which tend to favor permitting covered transactions to occur with little to no mitigation requirements—and these representatives will then obscure the results and purposes of such sidebar meet- ings from DOD and IC representatives. This hampers DOD, IC, and sometimes even State Department representatives from full participation in the process or from advocating national security interests as well as they should. Greenfield Investments. Congress should close the loophole on greenfield investments and require CFIUS review of investments in U.S.-based greenfield assets by Chinese-controlled entities to assess any potential harm to U.S. national and economic security. In the 2018 Foreign Risk and Review Modernization Act (FIRRMA),51 one important category of foreign transactions left out of the bill was greenfield investments, particularly by Chinese state-owned enterprises (SOEs). Greenfield investments by Chinese SOEs pose a unique threat, and they should be met with the highest scrutiny by all levels of government. Greenfield investments result in the control of newly built facilities in the U.S., and they were not addressed in FIRRMA primarily because governors and state governments embrace them. That is understandable; they typically bring the promise of creating American jobs. However, the goal of such Chinese SOEs is to siphon assets, technological innovation, and influence away from U.S. businesses in order to expand the global presence of the Chinese Communist Party. While the Chinese government keeps its domestic markets largely insulated from foreign influence, it regularly invests in the U.S. and other countries under the “green- field” model. Firms fully owned by China’s Communist regime are increasingly buying land, building factories, and taking advantage of state and local tax breaks on American soil. Treasury should examine creating a school of financial warfare jointly with DOD. If the U.S. is to rely on financial weapons, tools, and strategies to prosecute international defensive and offensive objectives, it must create a specially trained group of experts dedicated to the study, training, testing, and preparedness of these deterrents. Recent experience has demonstrated that the U.S. cannot depend on the rapid development and deployment of untested, academically developed finan- cial actions, stratagems, and weapons on an ad hoc basis.

— 819 — Trade 14. Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,” Politico, January 24, 2019, https://www.politico.com/story/2019/01/24/duffy-finds-18-co-sponsors-for-bill-to-increase-trumps- trade-powers-2555509 (accessed February 26, 2023). 15. FTAs like NAFTA represent a carve-out from the WTO’s unconditional MFN rule and generally lead to tariffs that tend to be set at more reciprocal levels. 16. H.R.764, United States Reciprocal Trade Act, § 3(b)(1) and (b)(2). 17. Damian Paletta, “Speaker Ryan Admits Defeat, Giving up on Border Adjustment Tax,” The Washington Post, July 27, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/07/27/paul-ryan-admits-defeat-giving- up-on-border-adjustment-tax/ (accessed February 25, 2023). 18. This section draws on analyses in White House Office of Trade and Manufacturing Policy, How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World, June 2018, https://trumpwhitehouse.archives.gov/wp-content/uploads/2018/06/FINAL-China-Technology- Report-6.18.18-PDF.pdf (accessed February 25, 2023). 19. Bloomberg News, “Xi’s Vow of World Dominance by 2049 Sends Chill Through Markets,” October 26, 2022, https://www.bloomberg.com/news/articles/2022-10-26/xi-s-vow-of-world-dominance-by-2049-sends-chill- through-markets?leadSource=uverify%20wall (accessed February 25, 2023). 20. Executive Office of the President, United States Trade Representative, 2017 Report to Congress on China’s WTO Compliance, January 2018, https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20 WTO%20Report.pdf (accessed February 25, 2023). 21. White House Office of Trade and Manufacturing Policy, How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World. 22. The National Medium- and Long-Term Program for Science and Technology Development Plan (2006–2020): An Outline, The State Council, The People’s Republic of China, p. [55], https://www.itu.int/en/ITU-D/ Cybersecurity/Documents/National_Strategies_Repository/China_2006.pdf (accessed March 21, 2023). 23. Commission on the Theft of American Intellectual Property, Update to the IP Commission Report: The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy, February 2017, pp. 2, 11, and 12, http://www.ipcommission.org/report/IP_Commission_Report_Update_2017.pdf (accessed February 25, 2023). 24. The laws, which have been put in place for national security purposes, have been promulgated under the Arms Export Control Act (AECA), 22 U.S.C. Ch. 39, §§ 2751–2756, 2761–2781, 2785, and 2791–27999aa-2, https://www.law.cornell.edu/uscode/text/22/chapter-39 (accessed February 25, 2023) and the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. Ch. 35, §§ 1701–1708, https://www.law.cornell.edu/ uscode/text/50/chapter-35 (accessed February 25, 2023). 25. Ministry of Education, People’s Republic of China, “Statistics on Studying in China in 2018,” http://www.moe. gov.cn/was5/web/search?searchword=Statistics+on+Studying+in+China+in+2018&channelid=254028&page=1 (accessed March 21, 2023). 26. Michael Brown and Pavneet Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable a Strategic Competitor to Access the Crown Jewels of U.S. Innovation, Updated with 2016 and 2017 Data,” Defense Innovation Unit Experimental (DIUx), January 2018, https://admin.govexec. com/media/diux_chinatechnologytransferstudy_jan_2018_(1).pdf (accessed February 25, 2023). The DIUx describes itself as “the only DOD Organization focused on accelerating the adoption of commercial and dual- use technology to solve operational challenges at speed and scale.” Defense Innovation Unit Experimental, “About,” https://www.diu.mil/ (accessed February 25, 2023). 27. Brown and Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable a Strategic Competitor to Access the Crown Jewels of U.S. Innovation, Updated with 2016 and 2017 Data,” p. 18. 28. Ingrid Lunden, “Huawei Puts $1M into a New AI Research Partnership with UC Berkeley,” TechCrunch, October 11, 2016, https://techcrunch.com/2016/10/11/huawei-puts-1m-into-a-new-ai-research-partnership-with- ucberkeley/ (accessed February 25, 2023). 29. Press release, “President Trump Announces Strong Actions to Address China’s Unfair Trade,” Office of the United States Trade Representative, March 22, 2018, https://ustr.gov/about-us/policy-offices/press-office/ press-releases/2018/march/president-trump-announces-strong (accessed February 25, 2023).

— 819 — Trade 14. Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,” Politico, January 24, 2019, https://www.politico.com/story/2019/01/24/duffy-finds-18-co-sponsors-for-bill-to-increase-trumps- trade-powers-2555509 (accessed February 26, 2023). 15. FTAs like NAFTA represent a carve-out from the WTO’s unconditional MFN rule and generally lead to tariffs that tend to be set at more reciprocal levels. 16. H.R.764, United States Reciprocal Trade Act, § 3(b)(1) and (b)(2). 17. Damian Paletta, “Speaker Ryan Admits Defeat, Giving up on Border Adjustment Tax,” The Washington Post, July 27, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/07/27/paul-ryan-admits-defeat-giving- up-on-border-adjustment-tax/ (accessed February 25, 2023). 18. This section draws on analyses in White House Office of Trade and Manufacturing Policy, How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World, June 2018, https://trumpwhitehouse.archives.gov/wp-content/uploads/2018/06/FINAL-China-Technology- Report-6.18.18-PDF.pdf (accessed February 25, 2023). 19. Bloomberg News, “Xi’s Vow of World Dominance by 2049 Sends Chill Through Markets,” October 26, 2022, https://www.bloomberg.com/news/articles/2022-10-26/xi-s-vow-of-world-dominance-by-2049-sends-chill- through-markets?leadSource=uverify%20wall (accessed February 25, 2023). 20. Executive Office of the President, United States Trade Representative, 2017 Report to Congress on China’s WTO Compliance, January 2018, https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20 WTO%20Report.pdf (accessed February 25, 2023). 21. White House Office of Trade and Manufacturing Policy, How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World. 22. The National Medium- and Long-Term Program for Science and Technology Development Plan (2006–2020): An Outline, The State Council, The People’s Republic of China, p. [55], https://www.itu.int/en/ITU-D/ Cybersecurity/Documents/National_Strategies_Repository/China_2006.pdf (accessed March 21, 2023). 23. Commission on the Theft of American Intellectual Property, Update to the IP Commission Report: The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy, February 2017, pp. 2, 11, and 12, http://www.ipcommission.org/report/IP_Commission_Report_Update_2017.pdf (accessed February 25, 2023). 24. The laws, which have been put in place for national security purposes, have been promulgated under the Arms Export Control Act (AECA), 22 U.S.C. Ch. 39, §§ 2751–2756, 2761–2781, 2785, and 2791–27999aa-2, https://www.law.cornell.edu/uscode/text/22/chapter-39 (accessed February 25, 2023) and the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. Ch. 35, §§ 1701–1708, https://www.law.cornell.edu/ uscode/text/50/chapter-35 (accessed February 25, 2023). 25. Ministry of Education, People’s Republic of China, “Statistics on Studying in China in 2018,” http://www.moe. gov.cn/was5/web/search?searchword=Statistics+on+Studying+in+China+in+2018&channelid=254028&page=1 (accessed March 21, 2023). 26. Michael Brown and Pavneet Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable a Strategic Competitor to Access the Crown Jewels of U.S. Innovation, Updated with 2016 and 2017 Data,” Defense Innovation Unit Experimental (DIUx), January 2018, https://admin.govexec. com/media/diux_chinatechnologytransferstudy_jan_2018_(1).pdf (accessed February 25, 2023). The DIUx describes itself as “the only DOD Organization focused on accelerating the adoption of commercial and dual- use technology to solve operational challenges at speed and scale.” Defense Innovation Unit Experimental, “About,” https://www.diu.mil/ (accessed February 25, 2023). 27. Brown and Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable a Strategic Competitor to Access the Crown Jewels of U.S. Innovation, Updated with 2016 and 2017 Data,” p. 18. 28. Ingrid Lunden, “Huawei Puts $1M into a New AI Research Partnership with UC Berkeley,” TechCrunch, October 11, 2016, https://techcrunch.com/2016/10/11/huawei-puts-1m-into-a-new-ai-research-partnership-with- ucberkeley/ (accessed February 25, 2023). 29. Press release, “President Trump Announces Strong Actions to Address China’s Unfair Trade,” Office of the United States Trade Representative, March 22, 2018, https://ustr.gov/about-us/policy-offices/press-office/ press-releases/2018/march/president-trump-announces-strong (accessed February 25, 2023). — 820 — Mandate for Leadership: The Conservative Promise 30. “From China with Love: AI, Robotics, AR/VR Are Hot Areas for Chinese Investment In US,” CB Insights, August 1, 2017, https://www.cbinsights.com/research/chinese-investment-us-tech-expert-research/ (accessed February 25, 2023). 31. “Remarks by President Obama and President Xi of the People's Republic of China in Joint Press Conference,” The White House, September 25, 2015, https://obamawhitehouse.archives.gov/the- pressffice/2015/09/25/remarks-president-obama-and-president-xi-peoples-republic-china-joint (accessed February 25, 2023). 32. Ankit Panda, “It’s Official: Xi Jinping Breaks His Non-Militarization Pledge in the Spratlys,” The Diplomat, December 16, 2016, https://thediplomat.com/2016/12/its-official-xi-jinping-breaks-his-non-militarization- pledge-in-the-spratlys/ (accessed February 25, 2023). 33. Press release, “USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices,” Office of the United States Trade Representative, June 15, 2018, https://ustr.gov/about-us/policy-offices/press-office/press- releases/2018/june/ustr-issues-tariffs-chinese-products (accessed February 25, 2023). 34. Yen Nee Lee, “‘New Consensus’ Reached on US–China Trade, Says Chinese Vice Premier Liu He,” CNBC, updated April 5, 2019, https://www.cnbc.com/2019/04/05/us-china-trade-new-consensus-reached-says- chinas-liu-he.html (accessed February 25, 2023). 35. Reuters, “China Backtracked on Nearly All Aspects of US Trade Deal: Sources,” CNBC, May 8, 2019, https:// www.cnbc.com/2019/05/08/china-backtracked-on-nearly-all-aspects-of-us-trade-deal-sources.html (accessed February 25, 2023). 36. Fact Sheet, “Economic and Trade Agreement Between the United States of America and the People’s Republic of China,” Office of the United States Trade Representative, January 15, 2020, https://ustr.gov/sites/default/ files/files/agreements/phase%20one%20agreement/US_China_Agreement_Fact_Sheet.pdf (accessed February 25, 2023). 37. Warren Buffett, “Warren Buffett: Here’s How I Would Solve the Trade Problem,” Fortune, April 29, 2016, http:// fortune.com/2016/04/29/warren-buffett-foreign-trade/ (accessed February 25, 2023). 38. See, for example, Jeffrey Miron, “Forget the Wall Already, It’s Time for the U.S. to Have Open Borders,” Cato Institute Commentary, July 31, 2018, https://www.cato.org/publications/commentary/forget-wall-already- its-time-us-have-open-borders (accessed February 25, 2023); Scott Lincicome and Alfredo Carrillo Obregon, “The (Updated) Case for Free Trade,” Cato Institute Policy Analysis No. 925, April 19, 2022, https://www.cato. org/sites/cato.org/files/2022-04/PA-925_2.pdf (accessed February 25, 2023); Katheryn Russ, “Yes, US Trade Agreements Led to Economic Gains, Especially in Services, New Report Says,” Peterson Institute for International Economics, Trade and Investment Policy Watch Blog, July 20, 2021, https://www.piie.com/blogs/ trade-and-investment-policy-watch/yes-us-trade-agreements-led-economic-gains-especially (accessed February 25, 2023); Monica de Bolle, “Why Remittance Taxes to Finance a Border Wall Are a Bad Idea…for the US,” Peterson Institute for International Economics, Realtime Economics Blog, January 10, 2017, https://www. piie.com/blogs/realtime-economic-issues-watch/why-remittance-taxes-finance-border-wall-are-bad-idea-us (accessed February 25, 2023). 39. This is a key theme of the author’s White House memoir Taking Back Trump’s America: Why We Lost the White House and How We’ll Win It Back (New York and Nashville: Bombardier Books, 2022). 40. 19 U.S.C. § 1862, https://www.law.cornell.edu/uscode/text/19/1862 (accessed February 27, 2023). 41. For a historical example, see Douglas A. Irwin, “Did Late-Nineteenth-Century U.S. Tariffs Promote Infant Industries? Evidence from the Tinplate Industry,” Journal of Economic History, Vol. 60, No. 2 (June 2000), pp. 336–360, https://www.jstor.org/stable/2566374 (accessed February 21, 2023). For a recent example, see Gary Clyde Hufbauer and Eujin Jung, “The High Taxpayer Cost of ‘Saving’ US Jobs Through ‘Made in America,’” Peterson Institute for International Economics, Trade and Investment Policy Watch, August 5, 2020, https:// www.piie.com/blogs/trade-and-investment-policy-watch/high-taxpayer-cost-saving-us-jobs-through-made- america (accessed February 21, 2023). 42. Stephen J. Dubner, “Were Colonial Americans More Literate than Americans Today?” Freakonomics, September 1, 2011, https://freakonomics.com/2011/09/were-colonial-americans-more-literate-than- americans-today/ (accessed February 21, 2023).