Biden Administration Requires US Firms to Assess National Security in Outbound Investments

The U.S. House Committee on Financial Services convened on July 13, 2025, to discuss critical issues surrounding U.S. policy on investment security, particularly focusing on outbound investments and their implications for national security.

The meeting began with a reference to the acquisition of Nippon Steel by U.S. Steel, highlighting concerns about foreign investments and their oversight. A committee member noted that this deal was largely managed outside the Committee on Foreign Investment in the United States (CFIUS) process, with prior administration involvement before a formal review could occur.

A significant portion of the discussion centered on the outbound investment security program. One member emphasized the importance of understanding the dynamics of investments flowing out of the U.S., particularly to China. They pointed out that since Xi Jinping's rise to power, the Chinese Communist Party (CCP) has increasingly integrated itself into the private sector, with nearly three-quarters of private enterprises having established CCP cells by early 2017. By 2021, the CCP had achieved complete coverage of the 500 largest firms in China. This context was presented to underline the necessity of scrutinizing not only incoming investments but also those leaving the U.S. for China.

The conversation then shifted to the competitive landscape of the global economy, particularly in advanced technologies such as artificial intelligence and semiconductors. A representative from Texas highlighted that American investors are actively seeking to position their capital strategically. Under the Biden administration's outbound investment rule, U.S. firms are now required to assess whether their transactions could raise national security concerns, guided by a published list of restricted entities.

The meeting concluded with a recognition of the evolving challenges in investment security and the need for robust policies to safeguard national interests in an increasingly interconnected global economy. The committee members expressed a commitment to further discussions on these pressing issues in future sessions.