March 5, 2025
America First Investment Policy: Implications for Investors & Businesses
In late February, the White House issued the America First Investment Policy Memorandum. It previews future policy changes intended to counter threats to national security while preserving an “open investment environment” intended to “ensure that artificial intelligence and other emerging technologies of the future are built, created, and grown right here in the United States.”
This Debevoise update identifies nine significant policy measures from the memo, including a fast-track review for investments from “yet-to-be-specified allied and partner sources,” new rules prohibiting PRC-affiliated investors from buying critical American assets and a possible expansion of CFIUS jurisdiction. It says these policy measures will have a number of potentially significant implications for investors and businesses. Those include:
Difficult choices for investors seeking “fast-track” access. Because eligibility for expedited investment reviews will be conditioned in part on investors’ distance from the PRC, firms may have to pare back their PRC-related investments to gain “fast track” access.
A restrained approach to CFIUS mitigation agreements. The administration may have heeded the concerns of investors from allied countries, many of whom have grown frustrated with lengthy CFIUS reviews and burdensome mitigation agreements. As a result, CFIUS may take a more targeted and less resource-intensive approach to mitigation. However, the impact of the memorandum’s mitigation provision may be limited as it relates to investments from foreign adversary countries; CFIUS can perhaps be expected to prohibit these outright, rather than entering mitigation agreements.
Increased scrutiny of PRC- and other foreign adversary-affiliated investments, including through private equity and complex acquisition structures. As the administration seeks to further restrict PRC and other “foreign adversary” investment in the United States, we may see increased CFIUS attention to investments from these jurisdictions, with limited availability of ongoing mitigation to address any identified national security risks. This may include heightened scrutiny of minority investments from these jurisdictions to assess whether such investments in private equity funds and other complex acquisition structures are sufficiently “passive” to overcome concerns regarding “affiliation.”
We’re posting related memos in our “National Security Considerations” Practice Area.
– Meredith Ervine