Treasury Pick Backs Outbound Investment Screening, More Russia and Iran Sanctions
Scott Bessent, President-elect Donald Trump’s choice for Treasury secretary, said Jan. 16 that the U.S. should institute a “very rigorous screening process” to ensure its outbound investment does not help China catch up to the U.S. in such key technology areas as artificial intelligence, computing chips, quantum computing and surveillance.
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“The U.S. has the lead and we must make sure that we maintain it through smart policies,” Bessent said at his confirmation hearing before the Senate Finance Committee. "This is a very important issue."
His comments came in response to a question from Sen. John Cornyn, R-Texas, who has proposed a bill to require U.S. companies to notify the Treasury Department before making certain investments in several “countries of concern,” including China (see 2409230016).
Also at the hearing, Sen. Todd Young, R-Ind., told Bessent that President Joe Biden’s recent decision to block the acquisition of U.S. Steel Corp. by Japan’s Nippon Steel Corp. has caused “a lot of anxiety” in Gary, Indiana, where Nippon Steel promised to invest almost $1 billion in a U.S. Steel plant following approval of the takeover. Bessent noted that Trump also has opposed the deal (see 2412030033).
Asked by Young whether he would ensure that the Committee on Foreign Investment in the U.S., which Treasury chairs, conducts an impartial review if it’s told to take another look at the acquisition, Bessent seemed to confirm that he would, saying CFIUS would “conduct the same review that it always does.” Nippon Steel has asked a federal court to set aside Biden’s decision and order CFIUS to conduct a new review of the $14.9 billion transaction (see 2501060040).
Turning to sanctions, Bessent said the Biden administration hasn't taken enough action against the Russian energy sector, a key source of funding for Moscow’s war against Ukraine. He said he favors ramping up those sanctions to force Russia to enter peace talks.
Bessent would take a similar approach toward Iranian energy to curb Tehran’s terrorism funding. “As we can raise U.S. production, we would squeeze down the bad actors, especially Iran,” he said. “Through sanctions policy, I believe that we can … make Iran poor again. Not the Iranian people, the Iranian government.”
On exports, Bessent said he would press China to honor the commitments it made in the 2020 “phase one” trade deal to increase its purchases of U.S. agricultural products (see 2001150073). He also might “push the Chinese for a catch-up provision over the past four years.”
Responding to a question from Sen. Ben Ray Lujan, D-N.M., Bessent said he would continue the multi-agency Counter-Fentanyl Strike Force that Treasury launched in December 2023 to improve how the U.S. targets drug traffickers with sanctions and civil and criminal penalties (see 2312060032). “This is personal for me, as two families who are close to our family lost children to the fentanyl crisis,” he said. “It is my belief that President Trump is laser-focused on this issue.”