President Biden directed the Treasury-led committee that scrutinizes foreign investment in America to consider the national security impact any trade deals would have on U.S. technological leadership, including biotechnology and “elements of the agricultural industrial base that have implications for food security.” The executive order was issued amid rising concerns about Chinese purchases of U.S. land and companies.
Treasury Secretary Janet Yellen said the order would sharpen the focus of the Committee on Foreign Investment in the United States (CFIUS) “on protecting America’s national security while maintaining the U.S. open-investment policy.”
Agricultural groups have argued for years that the food supply should be considered part of national security, a case in point being the 2013 purchase of Smithfield Foods, the No. 1 U.S. pork producer, by the Shuanghui Group. The groups also say that the Agriculture Department should be a member of CFIUS.
This year, complaints were raised against plans by the Fufeng Group, based in Shandong, China, to build a corn milling plant 12 miles from a U.S. Air Force base near Grand Forks, North Dakota. The site would be “particularly convenient for monitoring air traffic flows in and out of the base, among other security-related concerns,” said the U.S.-China Economic and Security Review Commission, an independent agency.
Under Biden’s executive order, CFIUS, created in 1975, would consider five factors when assessing a transaction: the impact on U.S. supply chain resiliency, the effect on U.S. technological leadership, investment trends that could affect national security, cybersecurity risks, and risks to Americans’ personal data.
The order said sectors fundamental to U.S. technological leadership include microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, climate adaptation technologies, and “elements of the agricultural industrial base that have implications for food security.”
“As you all know, what the committee does is look at transactions on a transaction-by-transaction basis to assess national security risks,” said a senior administration official. “Now, issues of geography, jurisdiction, and the makeup of the investors would certainly go into the risk analysis, but there’s nothing that’s sort of China-specific about this order or CFIUS. Now, that said, it’s going to matter where investments are coming from and who the investors are.”
CFIUS members are the departments of Treasury, Justice, Homeland Security, Commerce, Defense, State, and Energy, along with the Office of the U.S. Trade Representative and the White House Office of Science and Technology Policy. The interagency committee is “authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States,” says the Treasury Department. CFIUS can block a transaction or require modifications in the name of national security.