June 25, 2026, 20:03 GMT | Comment
The US government's national security review of foreign investments in the US used to be one of the country's primary means of ensuring adversaries didn't steal American military secrets or gain access to personal information for blackmail, and preventing foreign governments from gaining influence over US industries, markets and even elections. Today, it is just one tool in an ever-expanding toolkit the government uses to achieve its goals.
The US government's national security review of foreign investments in the US used to be one of the country's primary means of ensuring adversaries didn't steal American military secrets or gain access to personal information for blackmail, and preventing foreign governments from gaining influence over US industries, markets and even elections.
Today the Committee on Foreign Investment in the US, or
CFIUS, an interagency committee authorized to review foreign investments in domestic businesses to identify and mitigate national security risks, is just one tool in an ever-expanding toolkit the US government uses to achieve its goals, said Hrishi N. Hari, co-chair of Dechert's national security practice.
"As we start to have this blurring of national security and economic security, you see the White House wielding different instruments at different times to achieve its objectives," said Hari, who co-authored a Dechert report addressing how CFIUS-like regimes around the world are changing. "My broader thesis on this is that national security regulation is becoming an integrated system."
The Dechert report, "The Evolving Global Landscape 2026 — FDI and National Security Review," addressed changes to global national security and foreign direct investment, or FDI, in 11 countries or regions. The report says such investment regimes are maturing and that the US and its allies are coordinating more closely on investment security strategy.
As FDI regimes proliferate around the globe, other governments are also taking a more expansive view of national security to include more than military and defense interests, the report says. In many cases, it now extends to advanced technology, sensitive data, critical infrastructure, communications assets and supply chains.
In many jurisdictions, lower jurisdictional thresholds and broader definitions of "investment" and "control" mean that FDI reviews can be triggered by transactions that historically may not have raised filing or approval issues.
In the US, CFIUS is supposed to be adaptable to changing threats. But President Donald Trump is using it in conjunction with other tools to achieve broad policy objectives, something US leaders didn't support in the past.
Hari said the tariff war was a perfect illustration: tariffs played a big role in supply chain considerations, but the supply chain was a big part of the national security discourse.
Another example is the way the US government imposed export controls on China and then peeled them back as part of bilateral negotiations.
"
The White House is wielding different instruments at different times to achieve its objectives," Hari said. "It's all interconnected, and investors who understand those connections have a real execution advantage as they approach their transactions."
— Recent CFIUS actions —
In July 2025, Trump ordered Suirui International Co.'s 2020 acquisition of Jupiter Systems to be unwound after an investigation by CFIUS found evidence of a "potential compromise of Jupiter's products used in military and critical infrastructure environments."
Hong Kong-based Suirui, majority owned by China-based Suirui Group Co., Ltd., is a cloud communications supplier; Jupiter Systems is an audiovisual equipment company. Suirui bought Jupiter on Feb. 28, 2020.
"There is credible evidence that leads me to believe" that Suirui Group Co., and Suirui International Co. "might take action that threatens to impair the national security of the United States" and that other provisions of the law "do not, in my judgment, provide adequate and appropriate authority for me to protect the national security in this matter," Trump said in his order (see
here).
In January, Trump issued an order blocking HieFo Corp. from acquiring semiconductor-related assets from Emcore Corp. The order, requiring divestment of the assets, citied national security concerns.
CFIUS reviewed the transaction and identified risks "relating to potential access to
EMCORE's intellectual property, proprietary know-how, and expertise and to the potential diversion of supply of indium phosphide chips manufactured by the EMCORE Digital Chips Business away from the United States" (see
here).
— Biggest risk in 2026 —
Hari said the biggest national security risk to mergers in 2026 is that parties treat CFIUS as a filing question, rather than a deal strategy question. Though risk is manageable in most transactions, he said, the deals that get into trouble are the ones where parties wait too long to confront difficult facts like sensitive tech, data, supply chain issues and anything with a China nexus.
"From my vantage point, CFIUS is generally more predictable than people assume," Hari said. "But it's unforgiving when parties misjudge the regulatory, political or geopolitical context."
The elephant in the room is usually China. The committee has made clear that it is looking for third-country exposure. This generally refers to a foreign investor having some kind of tie with China that isn't necessarily obvious.
An example would be a foreign investor making an investment in a US company that makes semiconductors. On the surface, the investment shouldn't raise concerns. They will be a minority investor, with no access to sensitive data or influence over the board.
But what they haven't unveiled is that over the past few years they've amassed a major position to the Chinese semiconductor industry. How do these investments fit together? What's the investor's grand plan? The prior investments may not be fully public, but CFIUS will still have access to this sort of information, and there is no hiding the ball.
"I don't think that everything has to be a national security issue, but the boundary is clearly expanding, and the risk calculus is becoming more contextual," Hari said. "A different way to think about this is that governments are no longer looking only at the ownership of a sensitive asset. They're looking at strategic capabilities, capital, tax, data and the governance rights that surround influence in each of these areas."
"The government's frame of reference is changing," he continued. "A transaction that might look routine from a corporate law perspective might raise questions because it touches compute, semiconductors, biotech, energy, telecom..."
In other words, as the definition of national security expands and the committee becomes just one means of accomplishing broader goals, companies have to know more than just the CFIUS rules.
The key is knowing which facts will matter to regulators, which facts can be mitigated through deal restructuring, and which facts will change the government's perception of a transaction to its very core.
Please email editors@mlex.com to contact the editorial staff regarding this story, or to submit the names of lawyers and advisers.
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