CFIUS Reviews Impact Foreign Investments Amid National Security Concerns

In a recent meeting of the U.S. House Committee on Financial Services, discussions centered on the evolving landscape of U.S. investment security policy, particularly in relation to foreign investments and national security. The meeting, held on July 13, 2025, highlighted the critical role of the Committee on Foreign Investment in the United States (CFIUS) in assessing potential risks associated with foreign transactions.

One of the key topics addressed was the use of tariffs as a tool for national security. A committee member noted that while tariffs have not traditionally been a primary consideration in CFIUS reviews, they could serve as an effective measure to mitigate risks associated with foreign investments. The discussion emphasized that tariffs could be strategically employed to negotiate and address underlying national security concerns, particularly in light of the previous administration's approach to trade and investment.

The meeting also examined the impact of the Foreign Investment Risk Review Modernization Act (FIRRMA) on international investment patterns. Since its implementation in February 2018, there has been a notable increase in investments from allied nations, while investments from China have decreased by approximately 15%. This shift underscores the importance of maintaining a balance between welcoming foreign investment and safeguarding national interests.

Another significant point of discussion was the outbound investment security program, which aims to regulate U.S. investments in sensitive sectors abroad. Experts highlighted the necessity for clear definitions of what constitutes a "covered transaction" to ensure effective enforcement. The complexity of distinguishing between different business activities within large corporations, such as Amazon, was raised as a challenge that needs to be addressed for the program to function effectively.

Concerns were also voiced regarding the consistency of the CFIUS review process, particularly in light of political influences on investment decisions. Experts cautioned against allowing national security to become a bargaining chip in trade negotiations, advocating for a rigorous, fact-based assessment of transactions to maintain the integrity of the review process.

As the committee continues to navigate these complex issues, the need for transparency and clarity in the enforcement of investment security measures remains paramount. The discussions from this meeting will likely inform future legislative actions and shape the U.S. approach to foreign investments in a rapidly changing global landscape.