WASHINGTON, D.C. — Sen. Tammy Baldwin and Rep. Ro Khanna introduced legislation on Thursday to create a federal board for reviewing direct foreign investment in the United States. The proposed legislation would establish the Foreign Investment Review Authority as an independent executive branch agency.
The authority would determine the permissibility of such investments. The board would consist of a president-appointed chair who would require Senate confirmation. It would also include designees from the secretaries of Commerce and Labor, the attorney general, and four presidential appointees, confirmed by the Senate, from a political party different from the president's. The legislation would also create an Office of the Chief Ethics Officer and a Public Oversight Board to receive complaints.
Baldwin said oversight is necessary to ensure returns benefit workers and communities. "If foreign countries are going to invest in the United States like the President says they are, we need some basic oversight and transparency to make sure its American workers and American communities seeing a return, not our adversaries, the President's family, or the well-connected," Baldwin said.
The legislation specifies that the board's initial reviews would include Chinese investment commitments made under the direction of the U.S.-China Board of Trade, Board of Investment, or a comparable institution. Initial reviews would also encompass a $550 billion investment commitment from Japan, a $350 billion commitment from South Korea, and a $500 billion commitment from Taiwan.
Covered investments subject to board review include any commitment made by a foreign country as part of a trade agreement or in response to U.S. tariffs, embargoes, or other trade authorities. The review process would evaluate each covered investment based on economic benefit, job creation, content sourcing, competition, and ethics. An investment would receive approval if the chief ethics officer confirms compliance with transparency rules, the board determines a net economic benefit, and the investment does not violate the legislation.
Investments from nations considered adversarial would undergo a heightened review process. The board would prohibit investments involving entities listed under the Uyghur Forced Labor Prevention Act or those subject to withhold release orders. Furthermore, the board would disallow investments that violate ethics laws or were likely made to confer a personal financial benefit on a U.S. government official. The board would possess the authority to suspend or prohibit investments found to be impermissible. "Our bill would ensure foreign countries are unable to leverage FDI to gain unfair access to the U.S. market or make corrupt deals that lack Congressional oversight," Khanna said.