Senator Brown Introduces Bill that Could Block Foreign Investments
Senator Sherrod Brown is introducing legislation that would give the federal government the power to block foreign companies from buying up U.S. firms.
The Foreign Investments Review Act, co-sponsored by Republican Chuck Grassley, would give the U.S. Department of Commerce authority to scrutinize the economic impact of foreign investments in American companies, and prohibit deals it deems harmful to the country’s long-term economic interest.
“This is all about protecting American workers and helping America's small businesses,” said Brown in a conversation with reporters on Thursday.
The proposal comes just a few months after a Chinese automaker, Great Wall Motors, expressed interest in acquiring Jeep, which has a manufacturing plant in Toledo. In Ohio, automotive manufacturing has been a major target for foreign investment.
“I don’t want investment from Chinese government-sponsored companies that have the focus and the plan to undermine U.S. businesses and throw American workers out of work,” said Brown.
But not everyone is convinced the bill is necessary. Tim Webster, who teaches international investment law at Case Western Reserve University, said that foreign companies love to put their cash in American ones because the business environment here is so open. Brown’s bill, he said, could tarnish that image.
"When you start to erect barriers and say any transaction needs to go through the Secretary of Commerce," he said, "the more difficult you make it for foreign investors."
On top of that, Webster said the federal government's assessment of what is detrimental to U.S. economic interests may be at odds with that of state governments and local businesses. But Brown insisted that each review by the Commerce Department would include a period for public comment.
"We expect workers to weigh in. We expect businesses to weigh in," Brown said.
According to the nonprofit JobsOhio, companies from about 45 different countries currently have operations in Ohio. And those companies, according to Commerce Department estimates, help support jobs for nearly 260,000 workers.
The United States is the largest recipient of foreign direct investment in the world, according to the Bureau of Economic Analysis. Such transactions reached a record $348 billion in 2015.