A long-awaited effort to stop American money from flowing into China’s military and strategic industries is now reportedly finally on the brink of becoming law.
House lawmakers have successfully inserted sweeping restrictions on U.S. outbound investment into the National Defense Authorization Act (NDAA), a $900 billion defense package that passed Wednesday and now heads to the Senate — and then President Trump’s desk.
For years, lawmakers have warned that American capital has been quietly helping fuel Beijing’s rise in critical technologies, including those linked to the Chinese Communist Party’s surveillance state, military expansion, and human-rights abuses.
The new restrictions represent Congress’s most aggressive attempt yet to stop U.S. investors from bankrolling the CCP’s ambitions.
Rep. Andy Barr of Kentucky, who authored the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act included in the NDAA, called the measure the strongest American safeguard ever proposed. “This legislation takes President Trump’s America First Investment Policy to the next level and puts Beijing on notice,” Barr said. “No more American money for the CCP to build missiles aimed at our troops, spy balloons to fly over our communities, or any other product that could harm Americans.”
If enacted, the measure would ban U.S. investments in sensitive Chinese technologies, require American firms to notify the Treasury Department of certain transactions in China, and give the Treasury secretary power to sanction companies tied to Beijing’s military or intelligence services.
Previous attempts to pass similar restrictions failed in 2023 and 2024, including resistance from then–House Financial Services chair Patrick McHenry, who argued that American investments might prevent Chinese state takeovers.
But bipartisan support has grown sharply as concerns mount over U.S. financial institutions’ role in propping up Chinese firms already on government blacklists. In 2023 alone, BlackRock funneled $6.5 billion into 63 such companies, according to the House Select Committee on the CCP.
The investment ban would also extend to adversarial nations such as Iran and North Korea.
Speaker Mike Johnson praised the measure, saying it advances Trump’s directive to end decades of U.S. investments that strengthened Communist China. “This is an important step to protect our national security and economic competitiveness,” he said.
Sen. John Cornyn, who authored the Senate version of the bill, called the pending law “landmark legislation” that ensures American innovation does not “end up in the hands of adversaries like the Chinese Communist Party to be weaponized against us.”
Even Democrats such as Sen. Elizabeth Warren have lined up behind the bill, calling it essential for maintaining U.S. leadership in advanced technology.
The NDAA also includes the BIOSECURE Act, which blocks federal contracts with biotech firms tied to foreign adversaries. Democrats previously delayed the measure, but China hawks scored a victory with its inclusion.
Still, not all Republicans are satisfied. Some objected to the NDAA’s continued funding for Ukraine, the failure to ban a central bank digital currency, and the inclusion of various DEI provisions. Others criticized the administration for simultaneously allowing Nvidia to sell advanced AI chips to China — even with a surcharge — warning it undermines the very protections Congress is trying to enact.
The Senate is expected to vote next week. If approved, President Trump is poised to sign one of the most significant security crackdowns on China in modern history.
[READ MORE: Federal Reserve Cuts Rates in Divisive Vote as Inflation and Hiring Slow Under Tariff Pressures]
