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White House tries to allay investor fears as stocks dip over planned restriction on Chinese investment in US technology
White House Director of Trade Policy Peter Navarro is seen on June 4. Photo: AFP
 
Stocks have been shaken as the US prepares a policy that will restrict investment by China and other countries in sensitive US technology
 
US President Donald Trump’s top trade adviser sought to tamp down market panic over the White House’s plans for investment restrictions against China by calling investors’ interpretations “a misunderstanding”.
 
The Dow Jones Industrial Average plummeted more than 400 points on Monday after Treasury Secretary Steven Mnuchin’s comments that investment restrictions would not be limited to China, “but to all countries that are trying to steal our technology”.
 
Mnuchin’s remark sparked concern among market participants that Washington’s looming trade war with Beijing might be fought on more international fronts.
 
“There’s no plans to impose investment restrictions on any countries that are interfering in any way with our country. This is not the plan,” trade adviser Peter Navarro said in an interview with CNBC on Monday.
 
“All we have done with the 301 investigation is to investigate what China was doing with our particular country with respect to technology, and all our president has done was to direct the secretary of the Treasury to come back with an assessment of that, which is due at the end of this month,” Navarro said, referring to tariffs to be levied under Section 301 of the Trade Act of 1974.
 
“And that assessment does not include any other countries.”
 
Before Mnuchin made his comments, Bloomberg and The Wall Street Journal reported that the White House was planning to heighten scrutiny of Chinese investments in sensitive US industries under an emergency law.
 
The administration’s plans would apply to companies involved in technologies such as new-energy vehicles, robotics and aerospace, Bloomberg reported. Meanwhile, the Journal said the Treasury Department was devising rules that would block firms with at least 25 per cent Chinese ownership from buying US companies in “industrially significant” technologies.
 
Mnuchin tweeted that these reports were “false, fake news”, although he did not deny that the plans existed – only that they would be applied not just to China.

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