NextFin News - Sen. Tammy Baldwin and Rep. Ro Khanna on Thursday unveiled legislation to create a new federal panel to review direct foreign investment in the United States. The bill, first shared with CNBC before introduction, would establish an independent executive-branch body called the Foreign Investment Review Authority and give it power to decide whether proposed investments are permissible.
Baldwin and Khanna cast the measure as a response to President Donald Trump’s expanding use of tariff relief to secure investment commitments from trading partners. They argue the current system does not adequately address the risk that foreign capital can be used to undercut workers, reward politically connected interests or blur the line between public policy and private gain.
The proposal would significantly expand the way Washington examines certain foreign transactions. CNBC reported that the authority would include a chair appointed by the president and confirmed by the Senate, designees from the Commerce and Labor departments and the Justice Department, and four additional presidentially appointed, Senate-confirmed members from the political party opposite the president. The bill would also create an Office of the Chief Ethics Officer and a Public Oversight Board to handle complaints.
That structure reflects the sponsors’ argument that foreign investment should be reviewed as an ethics and transparency issue as well as a national-security one. By requiring opposition-party representation and dedicated ethics oversight, the bill would limit White House control over the process. Baldwin, a Wisconsin Democrat, said in a statement that foreign investments can create jobs and support local economies, but can also allow “adversaries” to undercut American workers and allow “the President lining his pockets.” She added that if foreign countries are going to invest in the U.S. as Trump says they are, Americans need “basic oversight and transparency” to ensure the return goes to workers and communities, not to “our adversaries, the President’s family, or the well-connected.”
The legislation arrives after Trump tied trade concessions to investment pledges from abroad. CNBC reported that Trump has inked numerous investment deals with foreign nations seeking relief from sweeping tariffs he imposed at the start of his second term. Baldwin and Khanna’s criticism is that tariffs raise the cost of market access, investment pledges become the price of relief, and the president’s role in negotiating those arrangements raises questions about who benefits. Trump allies, by contrast, see the approach as hard bargaining that is steering capital back to the U.S.
Khanna, a California Democrat, has built a profile around antitrust politics, labor arguments and skepticism toward concentrated corporate power. Baldwin has focused much of her career on worker protection and financial oversight. The bill fits squarely within those priorities, combining Khanna’s distrust of opaque capital arrangements with Baldwin’s push for institutions that can police abuse before it becomes routine.
Supporters of foreign direct investment are likely to challenge the idea of a new review body. Foreign direct investment can bring factories, suppliers, jobs and tax revenue, and the U.S. has long competed to attract it. A tougher review process could slow transactions, add uncertainty to cross-border capital planning and push companies to spend more on legal and political risk management. Business groups and free-trade advocates are likely to argue that broader review may catch legitimate abuses while also making the U.S. look less predictable at a time when global capital is already unsettled by tariff policy and political volatility.
The bill also raises practical questions about how such an authority would work. An independent executive-branch body with a presidentially appointed chair and politically balanced board members could give Congress a more durable oversight mechanism, but it would still depend on funding, enforcement rules and agency cooperation. If the authority is meant to police corruption, it would need more than structure on paper. It would need subpoena power, clear disclosure thresholds and standards that can distinguish commercial investment from influence-seeking.
The proposal is likely to face partisan resistance in a Republican-led environment. For now, the central fight in Congress is whether the Foreign Investment Review Authority is treated as a serious oversight measure or as another front in the battle over Trump’s use of economic power.
Explore more exclusive insights at nextfin.ai.
