"Investment Restrictions Are Important
to Prevent China from Exploiting US Investments"
Scott Baesant, US Secretary of the Treasury, is attending the House Financial Services Committee on the 7th (local time). Photo by Reuters Yonhap News
Scott Baesant, US Secretary of the Treasury, announced that the first high-level trade talks since the start of the US-China trade war are scheduled to take place on the 10th (local time) in Geneva, Switzerland. Regarding US capital investment in China, he stated that there will be no “yellow zone” and signaled that clear regulations would be established.
According to Reuters and Bloomberg, Secretary Baesant appeared before the House Financial Services Committee on the 7th and said, “The negotiations will be led by myself and Jamison Greer, the US Trade Representative,” making this announcement. He also stated that Peter Navarro, White House Trade Advisor, is not expected to attend.
When asked whether the negotiations with China are “advanced,” he replied, “As I said, we will start (the negotiations) on Saturday. This is the opposite of being ‘advanced.’” When asked whether the agreement would go beyond a memorandum of understanding (MOU) if the negotiations are concluded, he answered, “It will be an agreement on principles, and it will be documented within a few months.”
Regarding the policy to restrict US companies’ investments in China, he mentioned that he had discussed with lawmakers the previous day about the need to clarify the list of prohibited targets. He said, “We discussed the importance of creating red or blue lights for overseas investment, but not creating a ‘yellow zone.’” He emphasized, “The foreign investment security program is an important national security tool in efforts to restrict China from exploiting the benefits of US investment.”
There is growing support in the US Congress for legislation to restrict US capital investment in China. The Trump administration is also discussing ways to strengthen overseas investment guidelines. Secretary Baesant explained, “We are trying to ensure that the investment community is fully aware of and understands this program,” adding, “A little more time is needed to inform any bill and determine the direction of the legislation.”
There is also speculation that the Trump administration may exempt Chinese-made childcare products such as car seats, strollers, and cribs from tariffs. When asked by Democratic Representative Ayanna Pressley whether he supports exempting Chinese-made car seats, strollers, and cribs from tariffs, Secretary Baesant avoided giving a direct answer. When Representative Pressley pressed for a definite response, he replied, “It is currently under review.”
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