China urges Trump to lift security curbs in push for deals

China is pushing the Trump administration to roll back national-security restrictions on Chinese deals in the US, dangling the prospect of a massive investment package as part of a proposal that would upend a decade of policy. In addition, President Xi Jinping’s negotiators want the US to lower tariffs on imported inputs used by any Chinese factories built in the US, according to people familiar with the matter, who asked not to be identified discussing private deliberations.

The proposals were raised during trade talks in Madrid last month, the people said. During those meetings, the two sides reached a framework deal to keep Chinese social-media giant TikTok operating in the US, despite national security concerns raised by American lawmakers.

The Chinese floated a figure of $1 trillion earlier this year, according to one of the people, but the size of the potential investment being discussed now is unclear. After the Madrid talks, US Trade Representative Jamieson Greer told Fox Business that the two sides had discussed “the investment climate in the United States for Chinese companies.” Senior Chinese trade negotiator Li Chenggang told reporters the U.S. had “expressed its willingness to move together with China toward the same goal when it comes to reducing barriers to investment and promoting relevant cooperation on [the] trade and economic front.”

Days later, Xi urged President Donald Trump in a phone call to create conditions for “Chinese enterprises to invest” in America. The Chinese proposals are part of a bold set of requests that include pressing the US to change its decades old stance on Taiwan — another red line for Washington. They also represent a shift from trade talks during Trump’s first term that focused on purchases of US exports rather than investment in the US, an area subject to national security reviews.

A White House spokesperson didn’t respond specifically to questions about the talks, saying the administration is focused on ensuring that China is fulfilling its current obligations, an apparent nod to the so-called Phase 1 deal in Trump’s first term. The administration continues to engage with the Chinese to level the playing field for American businesses, farmers, and workers, the official said. The Commerce Ministry in Beijing didn’t immediately reply to a request for comment made on a public holiday in China. Liu Pengyu, a spokesman for the Chinese Embassy in Washington, said: “We hope the U.S. side will work with China to implement the important common understandings reached by our heads of state in their phone call.”

Trump has said he’ll meet Xi at a summit in South Korea this month. Whether the US president will accept China’s offer is unclear — though one of the people said the U.S. hasn’t yet ruled anything out. Questions remain around exactly how much investment China would pledge and the structure of such commitments, although the TikTok framework — American control of a Chinese entity’s US operations — could be one possibility. In a response to the Bloomberg report, Rep. John Moolenaar, the Republican chairman of the House Select Committee on China, said China “routinely cheats on its deals with America” and warned against loosening investment curbs. “China has weaponised its own market and companies against us for decades, and we cannot allow those companies to have more access to our economy,” Moolenaar said.

Matt Pottinger, a China hawk who served as deputy national security adviser during Trump’s first administration, said allowing a surge of Chinese investment into the US economy would be a major concession to Beijing. “That would be tantamount to the US becoming part of the Belt and Road — indeed, its final destination,” he said, referring to the $1 trillion-plus global infrastructure spending program that China launched in 2013 to bolster its economic and security interests, as well as its political influence.

Trump has made rebalancing the US economic relationship with China and the rest of the world, in part by securing major investment flows into the US, a pillar of his second-term trade strategy. He has repeatedly claimed the US has attracted $17 trillion in commitments since he took office in January. He’s also declared his top priority with China is “frankly, more importantly, a big deal.” Investment by Beijing of $1 trillion or more would dwarf commitments from other nations. The European Union has committed to $600 billion in investment by its companies over the next four years. Japan has signed on to finance $550 billion in investment into the US, while South Korea is in discussions over the structure of a $350 billion pledge.

Those pledges are arranged differently, with the Japanese one taking the form of a joint fund over which the US has significant discretion. It’s not clear which model any China deal would adhere to. Any agreement to greenlight significant Chinese investment would involve a sharp reversal of policies enacted by both Washington and Beijing over the past decade. A big Chinese investment push into the U.S. could face other barriers, with a growing number of states imposing their own restrictions in recent years, one person familiar with the discussions said. But securing greater access to the world’s biggest consumer market would be a blessing for China, where companies struggling with weak domestic demand are cutting both prices and jobs. While Beijing has slapped export controls on some of its most innovative green technologies, the nation’s executives are eager to break into new markets.

“If the TikTok deal can go through, I think it could open up more space for the U.S. to consider allowing Chinese investments,” said Laila Khawaja, research director of Gavekal Technologies. “We could see Chinese firms be asked to set up joint ventures with American firms while holding minority stakes and sell or license technologies to the ventures.” After hitting a record $57 billion in 2016, Chinese investment in the US has slowed to a trickle, coming in at $2.1 billion for the first half of 2025, according to data on completed deals compiled by Rhodium. After the buying binge, Beijing tightened capital controls, while Washington moved to shut down Chinese deals on national security grounds.

The Committee on Foreign Investment in the US has been at the heart of those efforts in sensitive sectors such as chips.

The Treasury-led panel scuttled an attempt by a Jack Ma-founded fintech company to buy payments giant MoneyGram International Inc., forced a Chinese investor to sell the gay dating app Grindr and kicked a Chinese cryptocurrency mining company off land near a US military base, citing national security concerns in each case.

As recently as February, a similar — if not even more hawkish – approach to Chinese investment in the US appeared to be prevailing. In a presidential memorandum that month laying out an America First Investment Policy, Trump said “investment at all costs is not always in the national interest.” That memo accused China of using investment in the US “to obtain cutting-edge technologies, intellectual property and leverage in strategic industries.” The National Security Council staffer who authored the memo, David Feith, was fired in April amid a purge of China hawks.