The newspaper, citing unidentified sources, said the initiatives were aimed at preventing Beijing from moving ahead with plans to develop companies able to compete globally in technologies including biotech and electric vehicles. Treasury Secretary Steven Mnuchin took to Twitter today to contradict reports that companies with at least 25 percent Chinese ownership will be barred from buying USA companies with "industrially significant technology".
It remains unclear exactly how the Trump administration will define what technology is "industrially significant".
Spokespersons for the Treasury and the Commerce Department did not respond to requests for comment on their investment and export control plans. President Donald Trump recently threatened to hit an additional $200 billion worth of Chinese imports with a ten percent tariff, if Beijing retaliates against his previous announcement of tariffs on $50 billion in imports.
Beijing has vowed to strike back in equal measure against the tariffs, the first wave of which are due to take effect July 6. Beijing is considered a key influencer on Pyongyang and Chinese President Xi Jinping said last week that China would "as always play a constructive role" in the process. Chinese officials have repeatedly rejected the United States allegations, accusing Washington of making unilateral and protectionist moves.
The original WSJ story was titled: Trump Plans New Curbs on Chinese Investment, Tech Exports to China.
American tariffs on foreign goods have threatened domestic supply chains and foreign manufacturing strategies for US multinationals, and they've prompted retaliatory tariffs from trade partners expected to stunt worldwide sales for USA companies.
The decision of the government to take a direct hand in corporate investment decisions under the pretext of national security is "a radical departure from the way we have engaged in economic governance", Chorzempa said.
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"The US has benefited enormously from having an open investment regime", Phil Levy, senior fellow on the global economy at the Chicago Council on Global Affairs, told CNNMoney late last month.
According to The Wall Street Journal, the measures likely would target investments in the United States by any firm that is 25 percent Chinese held, although that threshold could drop if the investment is considered sensitive.
Intel, which derived nearly a quarter of its sales from China previous year, was one of the biggest losers on the stock market with its share price falling by more than 3%.
The Defense Department faces mounting pressure from US lawmakers to increase military support for the democratically run island of Taiwan, which China considers a province. Congress, in parallel, is working on legislation to reform the Committee on Foreign Investment in the United States, which would scrutinize inbound investment in the US on national security grounds.
"There are many in the United States that are concerned that Huawei and ZTE will dominate 5G, and there are concerns about the national security implications of that".
It becomes clear that Washington is trying to inflict as much pain as possible to disrupt any attempt by China to usurp America's high-tech dominance. Legislation that would expand CFIUS' authority has bipartisan support in Congress and the backing of top Trump administration officials.