President Donald Trump waived sanctions<\/a> on Russia following a diesel deal with President Vladimir Putin.<\/p>\nThe rule announced Thursday would expand the restrictions to cover investments in hypersonic systems (capable of traveling at five times the speed of sound), supercomputing, biotechnology and artificial intelligence, though Treasury used Trump’s favored term for AI, \u201csuperintelligence” or SI.<\/p>\n
The proposed rule \u201csends an important signal to markets that Washington is tracking where U.S. capital is flowing and what capabilities it is helping build,\u201d said Craig Singleton, a senior fellow at the think tank Foundation for Defense of Democracies. <\/p>\n
The screening of outbound investments \u201crecognizes that capital can accelerate military-relevant capabilities just as surely as technology transfer can,\u201d Singleton said.<\/p>\n
Jason Chipman, a former Justice Department lawyer who specializes in cybersecurity, investment rules and export controls as a partner at the law firm WilmerHale, said the new rule \u201cwill require more substantial compliance programs to manage risk.\u201d<\/p>\n
Treasury’s rule to implement the 2025 law \u2014 the Comprehensive Outbound Investment National Security Act \u2014 would only apply to investments that exceed $50,000 and would exclude many financial investments, including stock purchases. <\/p>\n
Treasury will hear public comments on the proposal before issuing a final rule. <\/p>\n
\u201cIt\u2019s just the first step in a fairly long process to get to changes which presumably will be more enforcement-minded, to put more teeth behind the outbound investment program,\u201d said former U.S. trade official Ryan Majerus, now a partner at King & Spalding law firm. <\/p>\n
Since Trump’s first term, the United States and China \u2014 the world’s two biggest economies \u2014 have been locked in an economic and tech rivalry. They’ve restricted the export of sensitive technology and critical products (China’s rare earth minerals, America’s advanced computer chips) to each other and slapped tariffs on each other’s products. Trump and Chinese President Xi Jinping agreed last year to ease tensions while they engaged in talks, a temporary truce they last month extended into January. <\/p>\n
But the sparring continues. In July, the Treasury Department issued a $200,000 fine against a U.S.-based company for failing to report to the department a $92,500 investment in a Chinese artificial intelligence and robotics company by one of its subsidiaries.<\/p>\n<\/div>\n
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