Schumer Urges Trump to Suspend All China-Related Mergers Pending Before CFIUS to Exact Tougher Approach on North Korea

Senate Minority Leader Charles Schumer wants President Trump to take a stand against China for its kids-gloves response to North Korea’s nuclear missile activity by using the Committee on Foreign Investment in the United States (CFIUS) to deny all pending requests involving Chinese acquisition of U.S. companies. President Trump has been critical of China for not using leverage within its means to pressure North Korea, and Schumer’s request, which would block Chinese company efforts to establish control of U.S. companies presently being reviewed by the Committee, aims to drive Beijing to take stronger action by wielding its perceived influence over North Korea.

Several experts have cautioned that the Senator’s ask exceeds the review authority of CFIUS, which reviews transactions that could result in control of a U.S. business by a foreign person to determine the effect of such transactions on the national security of the United States. It remains to be seen whether the President would be willing to stretch the limits of CFIUS for broader foreign policy objectives, such as pressing China to get tougher on North Korea. While Trump may be open to considering an aggressive interpretation of Committee authority – particularly to achieve a desired outcome – the calculation may change under circumstances where the suggestion comes from a leader across the aisle, not to mention an evaluation of the scope of the Committee’s authority. At this point, it is not clear that CFIUS’s approach to Chinese company acquisitions of U.S. businesses will change.