U.S. Treasury Proposes Rule to Crack Down on High-Tech Investment in China and Other Adversaries

WASHINGTON (AP) — The U.S. Treasury Department proposed a rule Thursday aimed at cracking down on U.S. investments in high technology, such as supercomputers and artificial intelligence, in China, Russia, North Korea and other “countries of concern.”

The U.S. government has worked for years to deny China and other adversaries investments that could help them build their military power.

This program began in 2023 when then-President Joe Biden signed an executive order imposing restrictions on U.S. investments abroad in sectors such as semiconductors, quantum computing and artificial intelligence destined for China. Treasury then created the Outbound Investment Security Program.

In December 2025, Congress passed legislation that codified and expanded the program to target more technologies and more foreign countries, including Cuba, Iran, North Korea, and Russia.

Russia’s inclusion in the proposed rule came days after President Donald Trump lifted sanctions on Russia following a diesel agreement with President Vladimir Putin.

The rule announced Thursday would expand restrictions to cover investments in hypersonic systems capable of traveling at five times the speed of sound, supercomputers, biotechnology and artificial intelligence, although Treasury used Trump’s preferred term for AI, “superintelligence” or SI.

The proposed rule “sends an important signal to markets: Washington is monitoring U.S. capital flows and the capabilities they help build,” said Craig Singleton, a senior fellow at the think tank Foundation for Defense of Democracies.

The overseas investment review “recognizes that capital can accelerate military capabilities just as surely as technology transfer,” Singleton said.

Jason Chipman, a former Justice Department attorney who specialized in cybersecurity, investment rules and export controls as a partner at the WilmerHale law firm, said the new rule “will require more substantial compliance programs to manage risks.”

The Treasury rule to implement the Act of 2025 – the National Security Outbound Investment Act – would only apply to investments exceeding $50,000 and would exclude many financial investments, including stock purchases.

Treasury will hear public comments on the proposal before issuing a final rule.

“This is just the first step in a fairly long process to make changes that are likely to be more enforcement-oriented and give more teeth to the overseas investment program,” said former U.S. trade official Ryan Majerus, now a partner at the law firm King & Spalding.

In Beijing, China’s Foreign Ministry said the United States should respect the principles of a market economy and stop interfering in normal economic and trade cooperation between businesses.

Asked about Washington’s proposal to add biotechnology to the list, ministry spokesperson Mao Ning said that “overextending the concept of national security, taking discriminatory measures against specific countries, and artificially restricting trade, economic and investment activities serves no one’s interests.” »

She added that China will closely monitor relevant developments and take necessary measures to safeguard its interests.

Since Trump’s first term, the United States and China – the world’s two largest economies – have been locked in an economic and technological rivalry. They have restricted the export of sensitive technologies and critical products – such as rare earth minerals from China and advanced computer chips from the United States – and imposed tariffs on each other’s products. Trump and Chinese President Xi Jinping agreed last year to ease tensions while engaging in talks, a temporary truce they extended last month until January.

But the fighting continues. In July, the Treasury Department fined a U.S.-based company $200,000 for failing to report to the department a $92,500 investment in a Chinese artificial intelligence and robotics company by one of its subsidiaries.