US Enacts Investment Restrictions on Chinese Tech Firms Amid Supply Chain Security Measures
The U.S. has implemented new investment restrictions targeting Chinese tech firms as part of the Comprehensive Outbound Investment National Security Act of 2025, signed by President Trump on December 18. This legislation, included in the National Defense Authorization Act for fiscal year 2026, aims to prevent U.S. funds from supporting high-tech sectors in nations considered security risks, such as China and Russia, while also enhancing oversight of biotechnology firms and restricting the Department of Defense's procurement of sensitive materials from these countries.
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On December 18, President Donald Trump signed enhanced screening measures for outbound investments to prevent US funds from supporting high-tech Chinese companies. The revised Comprehensive Outbound Investment National Security Act of 2025 (COINS Act) was passed as part of the National Defense Authorization Act (NDAA) for fiscal year 2026, which allocates $901 billion.
The COINS Act establishes new Treasury rules limiting investments in advanced semiconductors, AI systems, quantum computing, high-performance computing, and hypersonic systems in nations deemed concerning, including China, Iran, North Korea, Russia, and Venezuela. The NDAA also restricts the Department of Defense from purchasing sensitive materials like molybdenum and gallium from these nations and mandates the creation of a Biotechnology Management Office. Additionally, it extends oversight of Chinese biotechnology firms and requires annual reporting on military companies linked to China.
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