S. 2861, the Protecting the USMCA from Harmful Chinese Investment Act

Bottom Line Up Front

S. 2861, the Protecting the USMCA from Harmful Chinese Investment Act, directs the United States Trade Representative (USTR) to use the next joint review under the United States-Mexico-Canada Agreement (USMCA) to push all three USMCA countries to establish foreign investment screening frameworks similar to the U.S. Committee on Foreign Investment in the United States (CFIUS) process, and to create a coordinated mechanism for addressing shared threats from nonmarket economy countries, principally the People’s Republic of China. The bill also authorizes the USTR to coordinate with the Departments of Treasury and State to provide technical assistance to Canada and Mexico in building out those frameworks.

Click here to read the full legislative text and view the list of cosponsors.

Why It Matters

• The United States, Mexico, and Canada collectively conduct roughly $1 trillion in bilateral goods and services trade with each partner annually, making the North American supply chain one of the most strategically vital in the world. Without aligned investment screening across all three USMCA countries, Beijing can exploit gaps, particularly in Mexico, to gain a foothold in critical infrastructure and sensitive sectors that undermine U.S. national security.
• CFIUS plays a critical role in protecting U.S. national security by reviewing foreign investments for national security risks, but its protections only extend to transactions within the United States. Canada and Mexico currently lack equivalent legislative frameworks, creating openings for Chinese state-linked entities to invest in strategically important sectors near U.S. borders. This bill would direct the USTR to advocate for Canada and Mexico to adopt CFIUS-like frameworks during the next USMCA joint review.
• The bill would also establish a trilateral coordination mechanism for USMCA countries to share information and act collectively against shared threats from nonmarket economy countries, including China. This kind of structured coordination is essential to ensuring that U.S. economic security policies cannot be circumvented by routing investment through Canada or Mexico.
• To make alignment achievable, the legislation authorizes the USTR to work with the Departments of Treasury and State to provide technical assistance, including expert advisers, training programs, and grants, to help Canada and Mexico build the institutional capacity needed to screen foreign investments effectively and in coordination with the United States.

Congressional Press Releases

Read statements from members of Congress who are supporting this legislation:

• → Sen. David McCormick (R-PA) and Sen. Catherine Cortez Masto (D-NV)