New Bill Pushes US, Canada, and Mexico to Create Unified Investment Screening System Targeting China

The “Protecting the USMCA from Harmful Chinese Investment Act” is about making sure our neighbors, Canada and Mexico, are playing the same defense game we are when it comes to foreign investment. Basically, Congress is saying that since the U.S., Canada, and Mexico trade over a trillion dollars annually, we need aligned security systems to protect that economic engine. The bill’s main goal is simple: get Canada and Mexico to adopt foreign investment review systems similar to the U.S.’s Committee on Foreign Investment in the United States (CFIUS), specifically targeting investments from “Nonmarket economy countries,” which is policy-speak for places like China.

The North American Security Huddle

This legislation directs the U.S. Trade Representative (USTR) to negotiate with our USMCA partners during the very next joint review. The USTR’s mission is to push for these countries to set up their own legal frameworks for screening investments based on national security risks, specifically modeling them after the U.S.’s Section 721 of the Defense Production Act. Think of it as standardizing the security software across all three countries. If a Chinese state-backed entity tries to buy a critical tech firm in Toronto or a major lithium mine in Mexico, the U.S. wants to ensure those transactions are reviewed with the same level of scrutiny they’d face in Dallas.

Footing the Bill for Our Neighbors’ Security

Here’s where it gets interesting for U.S. taxpayers. To help Canada and Mexico establish these complex new systems, the bill mandates that the USTR, Treasury, and State Departments offer “technical assistance.” This isn't just sending a few helpful emails. The definition of technical assistance here is broad, covering everything from sending expert advisors and providing training to offering grants of goods, services, or even cash to those foreign governments. It even includes giving grants to U.S. nonprofits to offer this advice. While helping allies is good policy, this broad authority means U.S. funds could be used extensively to influence and build regulatory structures in sovereign nations, without any clear cap or performance metrics laid out in the bill.

Who Feels the Change?

If this bill is successful, the biggest impact will be felt by foreign entities from nonmarket economies—chiefly those in China—who are looking to invest across North America. For them, the investment landscape just got a lot harder, closing potential loopholes they might have used in Canada or Mexico where review processes might be less stringent than in the U.S. However, this could also affect potential investors in Canada and Mexico more broadly, as new, restrictive review processes could slow down legitimate foreign direct investment. For people working in critical sectors—like tech, energy, or infrastructure—the hope is that this unified approach shields their industries from foreign control, securing supply chains and jobs across the continent. The challenge will be implementing these new rules without stifling beneficial investment or creating trade friction with our closest partners.