The Committee on Foreign Investment in the United States (CFIUS) turns 50 years old this year, and it still has lots to learn. The main disruptor – China – has ultimately added new layers to CFIUS oversight, but this oversight is in its infancy. In fact, despite President Trump being in office for a year now, Chris Pilkerton, Assistant Secretary for Investment Security at the U.S. Department of Treasury was only recently appointed to take over as Treasury’s leader in the inter‑agency CFIUS process. His role is to conduct risk assessment and mitigation decisions regarding foreign investments in U.S. companies and real estate.
Pilkerton testified on Jan. 14 before the House Financial Services Committee in a subcommittee hearing to review the latest at CFIUS under Trump. He reiterated what was already mostly obvious to Committee members: that CFIUS has new mandates designed to keep a more watchful eye on China, saying everything is too new to gauge success.
The Trump administration’s America First Investment Policy and the Biden-era Outbound Investment Security Program additions are new. Treasury has 450 days to implement the America First policy’s so-called Known Investor Program. Pilkerton told Rep. Andy Barr (R-KY-6) only that he would have these programs and latest rules implemented within that time frame. Given the fact that some of those rules were only added in December in the National Defense Authorization Act (NDAA), and that Pilkerton has not been on the job for 10 days, it was the only honest thing he could have said.
What’s new with CFIUS?
Trump directed CFIUS – essentially an inter-agency group comprised of important government departments that review foreign investment here – to create an expedited fast track for allied investment. This makes sense seeing how the Trump administration is trying to entice countries as diverse as Saudi Arabia and Taiwan to invest in the U.S.. This fast track is the Known Investor Program. It is this new pilot program, overseen by Pilkerton at Treasury, that is supposed to collect ownership and supply chain information from foreign investors in advance of investment deals.
Meanwhile, the NDAA included Barr’s bill, the Comprehensive Outbound Investment National Security Act (COINS Act), which is supposed to stop U.S. companies from “ unknowingly investing in the military industrial complex” of China by codifying and enhancing Trump’s America First Investment Policy and Biden’s Outbound Investment Security Program. Pilkerton’s office is responsible for implementing the new statute in the NDAA.
“We want to work with industry to better understand their supply chain and vendor needs. This way, we can work with interagency partners like the Small Business Administration or the Department of War’s Office for Industrial Base Policy, as well as the private sector, to better inform their deployment of capital to build secure and resilient sources of supply right here in the United States.”
– Chris Pilkerton, new Treasury lead for CFIUS, House Committee on Financial Services hearing, Jan. 14, 2026
House Members Discuss Holes In “Reverse CFIUS” Rules
Rep. Maxine Waters (D-CA-43) aired her concerns about restrictions on U.S. companies investing in China in what some have often referred to as the “reverse CFIUS.” Waters, who mentioned CPA’s previous reports on Wall Street and venture capital investments in Chinese advanced technology and defense contractors, has been trying to thread the needle between open investment policies, and restricting capital flow; a hard row to plow for Waters in venture capital rich California.
“The NDAA included language that provided exemptions that limit the coverage of passive U.S. financial investments in China tech firms, this despite numerous studies, for example, from Morgan Stanley, the U.S.-China Economic and Security Review Commission; and the Coalition for a Prosperous America, that showed that U.S. firms have billions passively invested in Chinese companies, including the military,” Rep. Waters said. Passive investments would be things like index funds.
“How does the Treasury Department assess whether U.S. investments, like retirement money, and funds managing for public sector pensions, are not being invested, unbeknownst to the investor, in companies that support adversarial governments defense sector,” she asked.
Pilkerton’s response showed there is more ironing out the wrinkles to be done here.
“Last year, Treasury issued regulations around this but given the fact that we have the COINS Act now we will be able to regulate and administer outbound investment, and we would anticipate that that would be a new regulatory regime. In other words, new rules will have to be written,” he told her.
China & CFIUS
The United States is the world’s top destination for foreign direct investment, with billions of new commitments announced last year during Trump’s deal making of investment capital and purchase orders of American goods in exchange or tariff relief.
Established in 1975 under the Department of Treasury, CFIUS is tasked with preserving this open investment environment while ensuring that open markets do not get infiltrated by adversaries, including China, in particular.
In Trump’s first term, he implemented the Foreign Investment Risk Review Modernization Act, otherwise known as FIRRMA, expanding CFIUS’ jurisdiction to include non-controlling investments such as lending programs into companies making high tech goods, infrastructure, and even sensitive personal data.
Rep. Andy Ogles (R-TN-5) laid out the crux of the China problem at the hearing, saying China “has blurred the lines between commercial activity and state power.”
Unlike Western markets where private companies operate independently of government direction, China’s corporate sector exists within a political system that compels cooperation with the Chinese Communist Party’s strategic objectives. Beijing’s Made in China 2025 Industrial Plan, its dominance of key supply chains, from rare earth minerals to semiconductors, and an expansive industrial subsidies program are all aligned to exploit open economies while denying access to the mainland China market.
“This is not benign investment,” Rep. Ogles said. “It is a long term strategy to acquire sensitive technologies, critical infrastructure and intellectual property that can be used to China’s advantage in future conflict or economic leverage.”
A recent CPA report highlighted how many Chinese companies evade U.S. scrutiny while still maintaining control of U.S.-based entities. Many Chinese companies mask their origin by routing ownership through Vietnam, Mexico, Singapore, the Cayman Islands, or Canadian entities. These jurisdictions, while legal, are often simply pencil-pushing, sales, or assembly operations designed to evade CFIUS oversight and make acquisitions appear not to be Chinese-linked. Chinese companies have also strategically restructured ownership just under legal thresholds to secure U.S. taxpayer funds for critical industries such as batteries and energy. This new model relies on credit, financing structure, contractual and managerial control, embedded technology, and maintaining supply-chain dependence to maintain control and benefits from U.S. operations, while lowering direct equity to qualify for U.S. federal tax credit. These are becoming a primary channel of China influence inside U.S. industries. CPA recommends that foreign investment in sectors facing Section 232 tariffs are prohibited unless the investor appears on a State Department approved “White List” that vets foreign investors to ensure no foreign adversary control and leverage. This establishes a higher and more secure standard than CFIUS, which operates on a presumption of approval unless a transaction is flagged or blocked.
Under the CFIUS program, there is no de facto prohibition of a particular country, Pilkerton said.
“When thinking about China investments and its impact on things like cybersecurity, military technologies, and intelligence technologies, those areas are particularly important for CFIUS and we rely upon the entire (inter-agency) committee to inform us of those national security risks so we can make a determination as to whether the risks exist, whether we can mitigate that risk, or whether we need to prohibit a transaction,” Pilkerton said in his most sobering description of the day.
In short, CFIUS is not in the business of banning China investment just because it has Chinese nationals involved.
“The U.S. homeland is not for sale,” said Rep. Zach Nunn (R-IA-3). He was concerned about Chinese investors buying American farm land. “I think there’s 330 transactions annually that your team reviews, that is no small accomplishment. But I want to make sure that there are prioritizations happening within there. I have to assess that CFIUS is doing some level of elevation on China investment for key sectors that are really critical to the United States.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
House Hearing on China Investment in US Reveals Much More Needs to be Done
The Committee on Foreign Investment in the United States (CFIUS) turns 50 years old this year, and it still has lots to learn. The main disruptor – China – has ultimately added new layers to CFIUS oversight, but this oversight is in its infancy. In fact, despite President Trump being in office for a year now, Chris Pilkerton, Assistant Secretary for Investment Security at the U.S. Department of Treasury was only recently appointed to take over as Treasury’s leader in the inter‑agency CFIUS process. His role is to conduct risk assessment and mitigation decisions regarding foreign investments in U.S. companies and real estate.
Pilkerton testified on Jan. 14 before the House Financial Services Committee in a subcommittee hearing to review the latest at CFIUS under Trump. He reiterated what was already mostly obvious to Committee members: that CFIUS has new mandates designed to keep a more watchful eye on China, saying everything is too new to gauge success.
The Trump administration’s America First Investment Policy and the Biden-era Outbound Investment Security Program additions are new. Treasury has 450 days to implement the America First policy’s so-called Known Investor Program. Pilkerton told Rep. Andy Barr (R-KY-6) only that he would have these programs and latest rules implemented within that time frame. Given the fact that some of those rules were only added in December in the National Defense Authorization Act (NDAA), and that Pilkerton has not been on the job for 10 days, it was the only honest thing he could have said.
What’s new with CFIUS?
Trump directed CFIUS – essentially an inter-agency group comprised of important government departments that review foreign investment here – to create an expedited fast track for allied investment. This makes sense seeing how the Trump administration is trying to entice countries as diverse as Saudi Arabia and Taiwan to invest in the U.S.. This fast track is the Known Investor Program. It is this new pilot program, overseen by Pilkerton at Treasury, that is supposed to collect ownership and supply chain information from foreign investors in advance of investment deals.
Meanwhile, the NDAA included Barr’s bill, the Comprehensive Outbound Investment National Security Act (COINS Act), which is supposed to stop U.S. companies from “ unknowingly investing in the military industrial complex” of China by codifying and enhancing Trump’s America First Investment Policy and Biden’s Outbound Investment Security Program. Pilkerton’s office is responsible for implementing the new statute in the NDAA.
“We want to work with industry to better understand their supply chain and vendor needs. This way, we can work with interagency partners like the Small Business Administration or the Department of War’s Office for Industrial Base Policy, as well as the private sector, to better inform their deployment of capital to build secure and resilient sources of supply right here in the United States.”
– Chris Pilkerton, new Treasury lead for CFIUS, House Committee on Financial Services hearing, Jan. 14, 2026
House Members Discuss Holes In “Reverse CFIUS” Rules
Rep. Maxine Waters (D-CA-43) aired her concerns about restrictions on U.S. companies investing in China in what some have often referred to as the “reverse CFIUS.” Waters, who mentioned CPA’s previous reports on Wall Street and venture capital investments in Chinese advanced technology and defense contractors, has been trying to thread the needle between open investment policies, and restricting capital flow; a hard row to plow for Waters in venture capital rich California.
“The NDAA included language that provided exemptions that limit the coverage of passive U.S. financial investments in China tech firms, this despite numerous studies, for example, from Morgan Stanley, the U.S.-China Economic and Security Review Commission; and the Coalition for a Prosperous America, that showed that U.S. firms have billions passively invested in Chinese companies, including the military,” Rep. Waters said. Passive investments would be things like index funds.
“How does the Treasury Department assess whether U.S. investments, like retirement money, and funds managing for public sector pensions, are not being invested, unbeknownst to the investor, in companies that support adversarial governments defense sector,” she asked.
Pilkerton’s response showed there is more ironing out the wrinkles to be done here.
“Last year, Treasury issued regulations around this but given the fact that we have the COINS Act now we will be able to regulate and administer outbound investment, and we would anticipate that that would be a new regulatory regime. In other words, new rules will have to be written,” he told her.
China & CFIUS
The United States is the world’s top destination for foreign direct investment, with billions of new commitments announced last year during Trump’s deal making of investment capital and purchase orders of American goods in exchange or tariff relief.
Established in 1975 under the Department of Treasury, CFIUS is tasked with preserving this open investment environment while ensuring that open markets do not get infiltrated by adversaries, including China, in particular.
In Trump’s first term, he implemented the Foreign Investment Risk Review Modernization Act, otherwise known as FIRRMA, expanding CFIUS’ jurisdiction to include non-controlling investments such as lending programs into companies making high tech goods, infrastructure, and even sensitive personal data.
Rep. Andy Ogles (R-TN-5) laid out the crux of the China problem at the hearing, saying China “has blurred the lines between commercial activity and state power.”
Unlike Western markets where private companies operate independently of government direction, China’s corporate sector exists within a political system that compels cooperation with the Chinese Communist Party’s strategic objectives. Beijing’s Made in China 2025 Industrial Plan, its dominance of key supply chains, from rare earth minerals to semiconductors, and an expansive industrial subsidies program are all aligned to exploit open economies while denying access to the mainland China market.
“This is not benign investment,” Rep. Ogles said. “It is a long term strategy to acquire sensitive technologies, critical infrastructure and intellectual property that can be used to China’s advantage in future conflict or economic leverage.”
A recent CPA report highlighted how many Chinese companies evade U.S. scrutiny while still maintaining control of U.S.-based entities. Many Chinese companies mask their origin by routing ownership through Vietnam, Mexico, Singapore, the Cayman Islands, or Canadian entities. These jurisdictions, while legal, are often simply pencil-pushing, sales, or assembly operations designed to evade CFIUS oversight and make acquisitions appear not to be Chinese-linked. Chinese companies have also strategically restructured ownership just under legal thresholds to secure U.S. taxpayer funds for critical industries such as batteries and energy. This new model relies on credit, financing structure, contractual and managerial control, embedded technology, and maintaining supply-chain dependence to maintain control and benefits from U.S. operations, while lowering direct equity to qualify for U.S. federal tax credit. These are becoming a primary channel of China influence inside U.S. industries. CPA recommends that foreign investment in sectors facing Section 232 tariffs are prohibited unless the investor appears on a State Department approved “White List” that vets foreign investors to ensure no foreign adversary control and leverage. This establishes a higher and more secure standard than CFIUS, which operates on a presumption of approval unless a transaction is flagged or blocked.
– CPA Economist Andrew Rechenberg’s report, “Blocking China-Linked Investments from Accessing U.S. Taxpayer Funds in Strategic Industries,” Jan. 8, 2026
Under the CFIUS program, there is no de facto prohibition of a particular country, Pilkerton said.
“When thinking about China investments and its impact on things like cybersecurity, military technologies, and intelligence technologies, those areas are particularly important for CFIUS and we rely upon the entire (inter-agency) committee to inform us of those national security risks so we can make a determination as to whether the risks exist, whether we can mitigate that risk, or whether we need to prohibit a transaction,” Pilkerton said in his most sobering description of the day.
In short, CFIUS is not in the business of banning China investment just because it has Chinese nationals involved.
“The U.S. homeland is not for sale,” said Rep. Zach Nunn (R-IA-3). He was concerned about Chinese investors buying American farm land. “I think there’s 330 transactions annually that your team reviews, that is no small accomplishment. But I want to make sure that there are prioritizations happening within there. I have to assess that CFIUS is doing some level of elevation on China investment for key sectors that are really critical to the United States.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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