The Biden administration is making moves to expand its authority by proposing new rules that would make it harder for foreign entities, particularly Chinese companies, to invest in land near military bases in the United States. This initiative aims to enhance national security measures and safeguard sensitive military installations from potential risks posed by foreign investments.
The Treasury Department unveiled a proposal to add over 50 military installations in 30 states to a list of locations considered critical to national security. This rule, if implemented, would reinforce the 2018 legislation that gives the Committee on Foreign Investment in the United States (CFIUS) the power to block land acquisitions within certain proximity to military bases.
Concerns over Chinese investments in the US have been escalating in Congress, leading to the Biden administration’s recent imposition of tariffs on Chinese imports, notably electric vehicles and solar panels. The proposed rule is a result of a comprehensive review aimed at bolstering CFIUS’s jurisdiction without targeting any specific country.
Treasury Secretary Janet L. Yellen emphasized the rule’s importance in safeguarding national security interests. The expanded scope of the rule would allow CFIUS to scrutinize real estate transactions closer to additional military installations, reflecting a more cautious approach in light of evolving security threats.
The proposal is expected to complicate future Chinese investments in the US, following a trend of diminishing Chinese presence due to heightened regulatory scrutiny and anti-China sentiment. President Biden’s recent order forced a Chinese-backed cryptocurrency firm to divest its property near a Wyoming nuclear missile base, reflecting the administration’s firm stance on foreign investments near sensitive military sites.
The rule’s impact on ongoing projects, such as Gotion’s manufacturing facility in Michigan near Camp Grayling, remains uncertain. While the rule would not retroactively affect completed transactions, future property acquisitions related to existing projects could face review by CFIUS.
In the broader context of national security concerns, the Biden administration is closely monitoring Nippon Steel’s acquisition of U.S. Steel, signaling a proactive approach to safeguarding critical assets from potential foreign interference beyond real estate proximity issues.
The Treasury Department’s decision to expand the list of sensitive military installations reflects a growing need to scrutinize real estate transactions more rigorously. With over 227 military bases currently under review, the focus is on enhancing CFIUS’s effectiveness in safeguarding national security interests.
Several states have initiated their own measures to restrict foreign investments amid concerns about potential national security risks. Florida, for instance, has implemented stringent regulations prohibiting most Chinese individuals without a green card from purchasing residential property, reflecting a broader trend of states taking proactive steps to safeguard critical assets.
