Baldwin, Khanna propose Foreign Direct Investment Board to investigate Trump

Senator Tammy Baldwin and Representative Ro Khanna are introducing a bill Thursday to establish a federal review board for foreign direct investment in the US, as President Donald Trump promotes global enterprises as part of trade deals he makes with countries around the world.

The bill, shared exclusively with CNBC ahead of its introduction, would create a “Foreign Investment Review Authority” as an independent executive branch authority. The panel will be responsible for reviewing foreign direct investments and determining whether they are acceptable.

It shall function as a board, with a chairman appointed by the President, subject to Senate confirmation; nominees of the Secretaries of Commerce and Labor and the Attorney General; With four board members appointed by the President of a political party and confirmed by the Senate, who is not the same as the President. It would also create an Office of the Chief Ethics Officer and a public oversight board to receive complaints.

Baldwin, D-Wis., and Khanna, D-Calif., say the board is necessary to ensure that foreign direct investment does not harm American workers. They also say it would potentially prevent corrupt deals, with lawmakers pointing to investments that Trump has made in negotiating trade deals around the world.

Trump has signed several investment agreements with other countries seeking relief from sweeping US tariffs imposed at the beginning of his second term.

“While foreign investments can create jobs and support our local economies, they can also open the door to American workers and opponents lining the pockets of the president,” Baldwin said in a statement.

He said, “If foreign countries are going to invest in the United States as the president says, we need some basic oversight and transparency to make sure that their return goes to American workers and American communities, not our adversaries, the president’s family, or well-connected people.”

According to a summary of the legislation provided by the lawmakers’ offices, the board’s first investments to review will be any investment commitments made by China under the direction of the US-China Trade Board, the Board of Investment or a comparable institution, the $550 billion investment commitment made by Japan, the $350 billion investment commitment made by South Korea and the $500 billion investment commitment made by Taiwan.

Investments covered for review by the Board, however, can be any “commitment of a foreign country to invest in the United States” made as part of a trade agreement in response to tariffs, sanctions, or any other U.S. trade or economic authority.

The review will evaluate each covered investment based on its economic benefits, jobs, material sourcing, competitiveness and ethics. If the Chief Ethics Officer confirms that the parties have complied with the applicable ethics and transparency rules created by the bill, the investment will be permitted if the Board determines that the investment provides a net economic benefit to the United States and the investment is not otherwise prohibited by the bill.

If the investment comes from a hostile nation, a thorough review will be required.

Investments will be prohibited if the parties are a subsidiary or parent company otherwise controlled by entities on the Uyghur Forced Labor Prevention Act list, or if the entity is subject to a restraining order. Investments that violate ethics laws, or deals that are more likely to be made based on a foreign government or foreign official’s desire to provide a personal financial benefit to a government official in the United States, also will not be permitted.

The Board will be able to suspend or restrict any investment found inappropriate.

Khanna said the bill would equip the government “with the tools it needs to ensure that the investment commitments negotiated by the President benefit working Americans, not our economic adversaries like the People’s Republic of China.”

“Our bill would ensure that foreign countries are unable to take advantage of FDI to gain unfair access to the U.S. market or make corrupt deals that lack congressional oversight,” he said.

The White House did not immediately respond to a request for comment.