After months of back-and-forth negotiations, Washington moved rapidly this past week to fend off the increasing transcendence of China’s tech industry, with Congress passing expanded national security controls over M transactions and the Trump administration heaping more pressure on China with threats of increased tariffs.

We’ve been following the reforms to CFIUS — the Committee on Foreign Investment in the United States — since the proposal was first floated late last year.

The committee is charged with protecting America’s economic interests by preventing takeovers of companies by foreign entities where the transaction could have deleterious national security consequences.

Through the Foreign Investment Risk Review Modernization Act of 2018, which was rolled into the must-pass National Defense Authorization Act and passed by Congress this week, CFIUS is gaining a number of new powers, more resources and staff, more oversight, and a charge to massively expand its influence in any M process involving foreign entities.

Lawfare has a great summary of the final text of the bill and its ramifications, but I want to highlight a few of the changes that I think are going to have an outsized effect on Silicon Valley and the tech industry more widely.

One of the top priorities of this legislation was to make it more difficult for Chinese venture capital firms to invest in American startups and pilfer intellectual property or acquire confidential user data.

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