The new America First Investment Policy announced by President Trump reshapes the United States' (US) approach to inbound and outbound investments, prioritising economic security as a matter of national security. While the policy keeps investment channels open for allied nations like New Zealand, it places tighter restrictions on Chinese investments in critical industries. For New Zealand, this shift creates opportunities for easier access to US markets but also raises challenges in navigating economic ties with China. New Zealand will need to balance its growing partnership with the US while maintaining its significant trade relationship with Beijing.
Who needs to read this and why?
New Zealand businesses and investors should take note of this shift in US investment policy. Companies engaged in high-tech sectors, infrastructure, or supply chains connected to both the US and China may face new regulatory considerations. Understanding the implications of this policy will be crucial for firms looking to expand into US markets or secure American investments.
What happened?
Inbound investment: New Zealand’s opportunities and challenges
President Trump’s policy focuses on blocking foreign adversaries—particularly China—from acquiring cutting-edge technologies, intellectual property, and critical infrastructure in the US. The administration will use the Committee on Foreign Investment in the United States (CFIUS) to strengthen oversight on transactions involving sensitive sectors like artificial intelligence, energy, healthcare, and agriculture.
One of the most significant aspects of the policy is the creation of an expedited “fast-track” investment approval process for allies, including New Zealand. This initiative aims to attract more investment from trusted partners by reducing bureaucratic hurdles. Previously, CFIUS had closely scrutinised investments from nearly all countries, often requiring mitigation agreements even for investors from allied nations. Under the new policy, CFIUS will remove “perpetual and expensive compliance obligations” for allied nations, instead favouring concrete actions that companies can complete within a specific time.
However, eligibility for fast-track investment depends on demonstrating independence from Chinese influence. Foreign investors seeking access to US assets in key sectors like advanced technology, infrastructure, and sensitive data will face fewer restrictions if they can demonstrate clear separation from China’s investment and technology-acquisition strategies. This shift may require New Zealand firms to reassess their global investment strategies to ensure compliance with US security requirements.
Outbound investment: US capital flows to New Zealand
While much of the America First Investment Policy focuses on inbound investment, it also introduces notable changes to outbound US investment. The policy increases scrutiny on US investments abroad, particularly in sectors deemed critical to national security. This includes efforts to prevent US capital from indirectly benefiting strategic competitors, particularly China.
For New Zealand, this means that US investors may face additional compliance requirements when investing in sectors such as artificial intelligence, biotechnology, quantum computing, and advanced manufacturing. The policy seeks to ensure that US outbound investments align with broader economic and security goals, limiting exposure to adversarial influence. New Zealand companies seeking US investment will need to demonstrate that they operate independently from Chinese partnerships, particularly in sectors with dual-use technologies. Additionally, regulatory oversight on outbound investments may result in more stringent due diligence processes, potentially increasing transaction timelines for New Zealand firms engaging with US investors.
Our view
For New Zealand, the America First Investment Policy reinforces the importance of its economic and security alliance with the US. As a Five Eyes intelligence partner, New Zealand is expected to align with Washington’s security-driven investment rules. However, given China’s role as New Zealand’s largest trading partner, this shift adds complexity to its foreign policy and economic strategy. New Zealand companies engaged in high-tech sectors or supply chains connected to both the US and China may face increasing pressure to choose sides.
Despite these challenges, the policy also creates opportunities for New Zealand by prioritising investment relationships with trusted allies. US firms looking to shift capital away from China may find New Zealand an attractive alternative, particularly in sectors aligned with US security priorities. This shift could lead to increased US investment in critical infrastructure, research and development, and emerging technologies within New Zealand.
Practical tips for investors
- Assess your exposure to China: Review your business’s existing partnerships, supply chains, and technology links with China to understand potential risks under US scrutiny.
- Structure investments strategically: Consider structuring investments to demonstrate independence from Chinese influence to ensure eligibility for fast-track approvals for inbound investments and compliance with outbound investment oversight.
- Stay informed on CFIUS and outbound regulations: Keep track of CFIUS developments and changes to compliance requirements for both inbound and outbound investments to avoid unexpected roadblocks.
- Ensure compliance for US investment into New Zealand: If seeking US investment, verify that your company operates independently from Chinese partnerships, particularly in dual-use technology sectors, to meet new regulatory expectations.
- Diversify investment portfolios: Reduce reliance on a single market by exploring alternative investment destinations that align with both US and New Zealand strategic interests.
- Seek legal and strategic guidance: Consult with our experts in foreign investment and trade to navigate complex regulatory landscapes and optimise investment opportunities under the new framework
How we can help?
Our team of experts can provide guidance on navigating international investment frameworks. We can assist New Zealand businesses in understanding and complying with US regulatory requirements, structuring investments to maximise benefits under the America First Investment Policy, and managing geopolitical risks associated with US-China tensions. Contact us to discuss how we can support your business strategy in this evolving landscape.
This article was co-authored by Oscar England, a Solicitor in our Corporate and Commercial team.
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