The White House has reversed plans to use an emergency law to impose investment restrictions on Chinese companies. It now will rely on legislation currently moving through the U.S. congress.

The decision is another turn around for the Trump administration over trade frictions with China.

CGTN’s Nathan King reports.

Just a few days ago, the White House was ready to impose tough investment and export restrictions on Chinese companies trying to access U.S. technology.

Now, the White House has said it will instead rely on legislation currently making its way through the U.S. Congress that will not target China specifically, but all nations wanting to invest in sensitive technologies developed in the U.S.

That legislation is called the Foreign Investment Risk Review Modernization Act. It strengthens powers of the Committee for Foreign Investments in the U.S., or CFIUS, giving it new powers to look at whole industry sectors rather than individual cases.

“We have the greatest technology in the world. People copy it and they steal it. But we have the greatest scientists, the great brains and we have to protect that,” U.S. President Donald Trump said. “We’re going to protect it. And that’s what we were doing[…] And that can be done through CIFIUS, and we have a lot of things we can do it through and we’re working that out.”

However, this doesn’t mean trade frictions are over between Washington and Beijing. On July 6th, the U.S. will impose a tariff of 25-percent on more than 800 products valued at $34 billion, and an additional $16 billion could follow. China has already announced it will impose matching 25-percent tariffs on $34 billion worth of U.S. imports to China on July 6th.

The White House is also threatening a 10-percent tariff on hundreds of billions of dollars worth on another batch of Chinese imports. Nevertheless, the U.S. China Business welcomes the recent reverse by the Trump administration, saying in a statement:

“The U.S.-China Business Council is pleased that President Trump has chosen to use existing tools for investment reviews and technology export controls to manage the concerns about technology transfer to China. At the same time, we need to ensure that we have the right balance between our national security and economic interests.”

This latest change in U.S. policy did not come out of any negotiations with Beijing but follows a contentious (and sometimes public,) debate among U.S. trade officials. Washington’s policy on trade and investment is by no means clear, and that makes reaching any deal with China, or any other nation, very difficult.