Bipartisan Bill Introduced to Strengthen USMCA and Curb Chinese Investment Risks

As the U.S., Canada, and Mexico embark on a joint review of the USMCA, a new bipartisan bill aims to prioritize North American alignment on foreign investment screening to combat the threat of investment from the People's Republic of China (PRC). Introduced by Senators Catherine Cortez Masto (D-Nev.) and Dave McCormick (R-Pa.), the Protecting the USMCA from Harmful Chinese Investment Act would direct the U.S. Trade Representative to prioritize coordination with Canada and Mexico on foreign investment screening.

Key Takeaways:

• The bill aims to strengthen U.S. national security by prioritizing better alignment with Canada and Mexico on the risks of investment from the PRC, a significant national security risk for the United States.
• Chinese investment in Mexico and Canada can pose a significant threat to the U.S. economy, with Chinese companies established deeper in supply chains, developed stronger trade links, and increased manufacturing in Mexico.
• Canada also faces continued economic threats from the PRC, with investment screening a key tool in Canada's response to those threats.
• The bill would direct the USTR to coordinate with Treasury and the Department of State on the provision of technical assistance to USMCA partners to support the establishment of frameworks for reviewing foreign investments for national security risks.
• Senator Cortez Masto has led efforts in Congress to stand up to the Chinese Communist Party's influence, introducing bills such as the FIGHT China Act, the PASS Act, and the Pacific Partnership Act.

Statistics:

• A December 2024 Financial Times analysis found that Chinese companies have established themselves deeper into supply chains, developed stronger trade links, and increased manufacturing in Mexico.
• China is a significant trading partner for the U.S., with the USTR formally initiating the public consultation process on the 2026 USMCA joint review on September 17.
• According to the bill, it is essential to adopt a common approach with neighbors to protect economies from harmful foreign investment, as 34% of Chinese trade in the USMCA region is composed of goods that are critical to USMCA countries.

Sources:

• Nevada Senator Catherine Cortez Masto
• Senator Dave McCormick
• Financial Times analysis (December 2024)
• U.S. Trade Representative (September 17)
• Senator Cortez Masto's FIGHT China Act
• Senator Cortez Masto's PASS Act
• Senator Cortez Masto's Pacific Partnership Act