Scaling 'Reverse CFIUS': A Comparative Review of Outbound Foreign Investment

Introduction

Section I explains the goals of this Note and primes the reader for a discussion of the various domestic actions impacting outbound investment. Section II of this Note introduces the rich history of

legislation and tariffs lodged against China and the bipartisan support for more hawkish measures against the People’s Republic of China (PRC). This Section will highlight the mingling of traditional free trade and protectionist regimes through initiatives such as America COMPETES, the CHIPS Act, CFIUS, and the failed NCCDA.

Section III of this Note analyzes the recently promulgated regulation curbing outbound investment in countries of concern’s critical industries. This rule, prompted by Executive Order 14105, went into effect in January of 2025. This Section will review the Treasury’s Advance Notice of Proposed Rulemaking (ANPRM), Notice of Proposed Rulemaking (NPRM), and Final Rule and analyze the national security and economic concerns that prompted the outbound investment rule as well as the push against the new regulation. Section IV will deliver a brief introduction to China’s economic position and the Chinese government’s response to the U.S.’s regulation. Section IV will also analyze China’s growing dependence on other nations for foreign direct investment (FDI) and trade.

Finally, this Note will perform a comparative analysis of the United States’ outbound foreign investment review system with those of other nations, namely the European Union, Japan, and Australia. Section V will first introduce the proposed outbound investment regulations in the E.U. and then weigh the likelihood of Japan passing similar legislation in the future. Section VI will perform a deeper analysis of China’s trade relations with Australia. In analyzing thehistory of trade relations between these two nations and comparing the statutory review boards currently in place in Australia to the structures present in the United States, this Note will shed light on whether the United States is on the right trajectory to supporting domestic business and whether other nations will follow suit in adopting similar outbound investment regulatory bodies. As one of China’s largest FDI providers, Australia provides key insights on the efficacy of the United States’ initiatives to curb outbound investment. The foreign policy and domestic concerns of different countries inform this Note’s

conclusions.

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Perez, Scaling Reverse CFIUS.pdf

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