
The United States spent 2017 laying the groundwork needed to aggressively pressure China on trade and investment in 2018. Now it appears the pressure is on. On Jan. 17, InsideTrade reported that the administration of U.S. President Donald Trump is contemplating setting up a system of reciprocity on Chinese foreign direct investment in the United States. Under that system, the United States would treat Chinese investment into U.S. sectors the same way China treats U.S. investment into its analogous sectors. It would fall to Chinese investors to prove their desired investments would be allowed under Chinese investment rules. Rather than limit Chinese investment, the Trump administration seems to want to force China to change its investment policies — which it has been slowly doing albeit at levels far below those expected. The risk Washington is taking, however, is enormous. The plan could face significant legal challenges internationally and domestically.