US Treasury proposes rule restricting high-tech investments in China, Russia and other adversaries

Oct 22, 2026

On October 22, 2026, the U.S. Treasury Department proposed rules under the 2025 Comprehensive Outbound Investment National Security Act to restrict American investments exceeding $50,000 in supercomputing, artificial intelligence, hypersonic weapons, and biotechnology across China, Russia, and North Korea. Treasury Secretary Scott Bessent stated the rule prevents foreign adversaries from leveraging U.S. capital to build military tech, while Chinese officials accused Washington of overstretching national security.

Treasury investment restriction rule

▪The U.S. Treasury Department will gather public feedback on the proposed outbound investment regulations before issuing a final rule.
▪On October 22, 2026, the U.S. Treasury Department proposed a rule under the Comprehensive Outbound Investment National Security Act restricting U.S. high-tech investments exceeding $50,000 in China, Russia, North Korea, and other designated countries of concern.
▪The U.S. Treasury Department's proposed investment rule excludes stock purchases and many financial investments, while allowing U.S. pharmaceutical companies to make cash licensing payments for Chinese medicines without acquiring equity.

Advanced technology restrictions

▪The U.S. Treasury Department's proposed rule expands restrictions to cover artificial intelligence, supercomputing, hypersonic systems capable of traveling at five times the speed of sound, and quantum information technologies.
▪In its proposed investment rule, the U.S. Treasury Department designated artificial intelligence using President Donald Trump's preferred term, superintelligence or SI.

Biotechnology investment limits

▪Research firm Veda stated that the proposed U.S. Treasury Department rule would prohibit U.S. companies from entering financial transactions with Chinese biotech companies or equipment manufacturers.
▪The U.S. Treasury Department added biotechnology to its proposed investment restrictions under the Comprehensive Outbound Investment National Security Act, targeting brain-computer interfaces, cell therapies, and gene modifications.
▪The Biotechnology Innovation Organization stated that an overly broad approach to biotech investment restrictions could create uncertainty for innovators and risk weakening U.S. biotechnology competitiveness.

Outbound Investment Security Program evolution

▪President Joe Biden initiated outbound U.S. investment restrictions in 2023 through an executive order targeting semiconductors, quantum computing, and artificial intelligence in China, leading to the creation of the Outbound Investment Security Program.
▪In December 2025, U.S. Congress passed the Comprehensive Outbound Investment National Security Act, codifying and expanding the Outbound Investment Security Program to cover additional technologies and foreign countries.
▪In July 2026, the U.S. Treasury Department fined U.S.-based Amidi LLC $200,000 for failing to disclose a subsidiary's $92,500 investment in Chinese artificial intelligence and robotics firm Shanghai Qiongche Intelligent Technology Co.

Russia sanctions waiver controversy

▪In December 2025, Congress explicitly included Russia alongside Cuba, Iran, and North Korea as statutory target countries under the Comprehensive Outbound Investment National Security Act.
▪The U.S. Treasury Department included Russia in its October 22, 2026 proposed investment rule days after President Donald Trump waived U.S. sanctions on Russia following a diesel agreement with President Vladimir Putin.

National security rationale

▪Foundation for Defense of Democracies senior fellow Craig Singleton stated that screening outbound U.S. capital recognizes that investments accelerate military capabilities just as directly as technology transfers.
▪U.S. Treasury Secretary Scott Bessent stated that the proposed regulations would strengthen the Outbound Investment Security Program to prevent foreign adversaries from using U.S. capital to develop critical technologies threatening national security.
▪Chinese Foreign Ministry spokesperson Mao Ning stated that the U.S. proposal overstretches national security concepts and uses discriminatory trade restrictions that serve no nation's interests.