Arrington Introduces Bill to Protect Americans from Malign Foreign Investments

Washington, D.C. - House Budget Chairman Jodey Arrington (TX-19) introduced the Consistency in Foreign Investment in the USMCA (CFIUSMCA) Act, legislation to stop foreign adversaries - particularly China - from using Mexico and Canada as backdoors to move goods into the United States under the U.S.-Mexico-Canada Agreement (USMCA). The bill would give U.S. trade officials clear authority to push for strengthened and more coordinated investment screening requirements throughout North America during the upcoming six-year review of USMCA to protect American jobs and national security.

"Mexico's weak investment standards have created a backdoor for China to move products into the United States tariff-free and allow CCP-aligned entities to gain a foothold in industries vital to our national security," said Chairman Arrington. "My Consistency in Foreign Investment in the USMCA Act will ensure our North American trading partners meet the same national security standards we set for ourselves and keep malign foreign investments out of America's backyard."

"By guarding against national security threats posed by foreign investments, strengthening an alignment between the U.S., Canada, and Mexico, the Consistency in Foreign Investment in the United States-Mexico-Canada Agreement Act will ensure stronger protections for American workers, consumers, and small businesses," said Rep. Brad Schneider (IL-10), the bill's Democratic co-lead. "Creating a CFIUS-like mechanism in both countries will encourage more closely monitored screening of foreign investments and reinforce the importance of North American coordination when reviewing for potential national security risks."

"China is actively investing in strategic industries in Mexico as they seek to infiltrate the U.S. and North American markets," said Mike Meyer, President of the North American Die Casting Association. "The Consistency in Foreign Investment in the USMCA Act will direct USTR to align the U.S., Canada, and Mexico to protect against these incursions, which result in Chinese state-owned enterprises shipping castings to the U.S. tariff-free and made out of Chinese metal and with Chinese machine tools."

"Companies backed by the Chinese Communist Party are expanding their hold in Mexico in an effort to import into the U.S. molds, tooling, and components made with Chinese machinery," said Kym Conis, Managing Director of the American Mold Builders Association. "Congress should pass the Consistency in Foreign Investment in the USMCA Act to direct USTR to work with our partners in Canada and Mexico to during USMCA negotiations to ensure thorough government reviews of investments in strategic industries."

"The USMCA joint review is a critical opportunity to close gaps in the agreement that Beijing exploits to circumvent U.S. economic security policies," said Connor Pfeiffer, Senior Director of Government Relations for FDD Action. "Investment screening is a key tool for addressing these threats, especially in Mexico. That's why FDD Action is proud to endorse this effort to protect North America from harmful Chinese investment."

Additionally, this legislation is co-sponsored by Rep. Nathaniel Moran (TX-01) and House Select Committee on China Chairman John Moolenaar (MI-02).

Background:

• The bill would provide USTR with the Congressional backing to ensure that Mexico and Canada adopt strong foreign investment review safeguards, similar to the U.S.'s Committee on Foreign Investment in the U.S. (CFIUS), in the upcoming six-year review of USMCA.
• During his first term, President Trump negotiated his signature USMCA agreement, which boosted exports of American agriculture, energy, and manufactured goods to both Canada and Mexico.
• This agreement provided significant benefits for the American people and was the first trade deal in American history to require the U.S. and its trading partners to jointly review the terms of the agreement every six years for areas of improvement.
• Even before USMCA went into force, economic and geopolitical rivals like China have sought to exploit the North American market and export goods duty-free to the U.S. For example, since President Trump first imposed tariffs on China in 2018, Chinese net annual foreign direct investment into Mexico has increased from $270 million to $710 million in 2024.
• While the U.S. and Canada maintain strong laws that adequately screen concerning foreign investments, Mexico's does not, posing a direct threat to the American economy and national security.
• The CFIUSMCA Act would give the Trump administration Congressional support to require that Mexico establish a foreign investment review mechanism consistent with the U.S.'s system.
• This legislation would also give USTR support to establish a shared mechanism for the U.S., Canada, and Mexico to coordinate in addressing shared threats to strategically important economic sectors and critical infrastructure in North America.

###