Confirming that the Trump administration was clearly spooked by the market’s Monday drop, following news that Trump “blinked” on the escalating trade war, and had decided against creating a new regime to review Chinese investment in the US and will instead rely on the existing CFIUS approach to protect US technology, Treasury Secretary Steven Mnuchin told CNBC that it was “unfortunate” the market got mixed messages and that all Trump advisors were unanimous on this decision.
“If there are mixed messages, that’s something that is unfortunate,” Mnuchin told CNBC’s “Squawk Box.” “What happened over the weekend there were leaks saying that president had made a decision had been made. It was completely not true.”
“When the president and I discussed this, he suggested I tweet on behalf of him to clarify that a decision had not been made,” Treasury secretary added. “Those leaks were not helpful to the markets or not helpful to the process.”
Mnuchin blamed White House trade advisor Peter Navarro for sending mixed signals Monday about the Chinese investment restrictions.
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Earlier on Wednesday, the White House announced that it won’t be looking to block companies with 25 percent or more of Chinese ownership from buying certain U.S. tech-related companies. Instead, the government will rely on the newly-strengthened Committee on Foreign Investment in the United States, or CFIUS, to deal with concerns.
In explaining the move, Mnuching told reporters that the move to use CFIUS to protect U.S. technology was “not intended to target China,” and added that CFIUS was able to respond appropriately to different threats on different technologies posed by different entities from different countries.
Mnuchin also said that if Congress fails to pass Firrma, the administration will look at new executive branch tools.
Separately, Trump made the following comment on his pivot: “I urge Congress to send me a strong bill as soon as possible and look forward to implementing it” to protect U.S. security and prosperity, President Trump says about the Foreign Investment Risk Review Modernization Act, known as FIRRMA.
“Upon enactment of FIRRMA legislation, I will direct my Administration to implement it promptly and enforce it rigorously, with a view toward addressing the concerns regarding state-directed investment in critical technologies identified in the Section 301 investigation”
“Should Congress fail to pass strong FIRRMA legislation that better protects the crown jewels of American technology and intellectual property from transfers and acquisitions that threaten our national security – and future economic prosperity- I will direct my Administration to deploy new tools, developed under existing authorities, that will do so globally.”
For now the market is taking the news in stride, seeing it as Trump walking back from “irreversible” escalations, and not only recovered all pre-market losses, but was modestly in the green.
via RSS https://ift.tt/2Ktodhm Tyler Durden