On 9 August, U.S. President Joe Biden signed Executive Order 14105 Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern. The E.O. prohibits new U.S. investments in China in three key sensitive technology sectors – semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems – while also requiring U.S. entities to notify the government of certain relevant transactions.
The restrictions will apply to “narrow subsets” of the three areas aimed at private equity, venture capital, joint ventures, and greenfield investments, and will only affect future investments. The specific regulations covering notifiable and prohibited transactions will be released for public comment by the Treasury Department before being put in place in 2024.
This most recent executive action by the Biden Administration is the latest in a series of escalating trade restrictions between the U.S. and China over the course of the past year, which has included the introduction of a new Foreign Direct Product Rule (FDPR) prohibiting the sale of advanced U.S. semiconductor technologies to China and, more recently, restrictions on Chinese exports of gallium and germanium – metals which are used for certain microchips and other high-tech products.
Access Partnership closely monitors ongoing dynamics concerning U.S.-China trade relations and provides global technology leaders with key insights on geopolitical developments. For more information on this topic, please contact Jacob Hafey at jacob.hafey@accesspartnership.com.
