Cass Urges Trump Administration to Reject Investment from China

Today, American Compass chief economist Oren Cass sent a letter to President Donald Trump voicing his concern that his administration may pursue a major commitment of Foreign Direct Investment (FDI) from China into the U.S. as part of ongoing discussions with President Xi Jinping.

The letter, which was also sent to Secretary of the Treasury Scott Bessent and U.S. Trade Representative Jamieson Greer, emphasizes that allowing Chinese FDI into the United States would drastically undermine the administration and American Compass’s shared goals of rebalancing trade between the United States and its partners, reindustrializing America, and resetting the global economic order. Cass writes:

“…pursuing Chinese FDI would repeat the mistake that the world made a generation ago when it welcomed China into the World Trade Organization. As with cheap imports then, the decision by North American, European, and East Asian countries to welcome large-scale Chinese investment now, and accept the Chinese industrial dominance that follows, may deliver the appearance of a short-term gain. Economists will undoubtedly cheer. But the result will be the much greater long-term pain of American decline.”

The letter stresses that achieving reciprocity, long the cornerstone of the administration’s trade policy, is impossible with an economy like China’s, which is rooted in authoritarianism and steered by state control.

American Compass previously detailed concerns about the incompatibility between American and Chinese markets in A Hard Break from China.