China’s investment in sensitive U.S. technology has the Trump administration so worried that it imposed tariffs on Chinese tech goods on Tuesday, while lawmakers are looking for ways to bar similar future investments. Why now? One reason is a recent Pentagon white paper that warns about Beijing’s plans to appropriate made-in-America tech.
Initially written last year and circulated to a small audience of military officials and lawmakers, the so-called DIUx Paper (named for the Defense Innovation Unit Experimental outreach group), describes how technological progress fits into China’s long-term strategic plans. The paper’s authors conclude that keeping pace will require a comprehensive U.S. government response, including investments in science and technology and other measures that go well beyond punitive trade restrictions.
In interviews, the authors were modest about the role that the paper is playing in the current tariff debate and cautioned against inflating its importance. But they acknowledge that they’ve discussed the paper at length with the members of the administration, the National Security Council, and Congress. Last spring, Sen. John Cornyn, R-Texas, cited the paper as he argued for new legislation to allow the Committee on Foreign Investment in the United States, or CFIUS, to restrict Chinese investment into U.S. tech companies, particularly startups. Theproposed legislation now enjoys the support of the Trump administration and is expected to pass.