OpEd: Treasury’s Outbound Investment Rule Risks Giving America’s Competitors an Unintended Gift (Chicago, IL) — National security and American innovation should be in sync – not at odds.
Unfortunately, a proposed Treasury rule on outbound investment risks pitting innovation against the best interest of our country by restricting U.S. companies in biotechnology and simultaneously leaving foreign competitors free to pursue similar opportunities.
The Treasury’s proposal would implement the COINS Act and, as drafted, would cover a wide range of biotechnology transactions involving countries that present varying security risks.
The proposal’s reach is broad. It could cover investment and partnerships connected to vaccines, antibodies, cell and gene therapies, and small-molecule drugs. U.S. companies could face restrictions on equity investments, follow-on financing, joint ventures, purchase options, and other ways of sharing risk and reward. Foreign competitors, including companies based in Europe and Japan, would not face the same U.S. restrictions on their deals.
This imbalance matters. If an American company cannot offer the terms a foreign competitor can, the foreign company would likely win the partnership. If U.S. firms are limited in expanding or maintaining certain operations abroad while their competitors can keep growing, the gap could widen further. And if the compliance burden and legal risks fall disproportionately on American companies, some may simply avoid deals that could support research, jobs, and future medicines here at home.
These rules do nothing to stop biotechnology from advancing in China. It could instead mean that non-U.S. companies and investors take a larger role in the same market, while American businesses lose influence and visibility.
For communities and businesses across Chicagoland, this is not an abstract debate about regulation. Innovation depends on networks of companies, researchers, investors, workers, and suppliers. When U.S. firms are sidelined, the consequences can reach far beyond a single transaction and end up affecting where research happens, who builds expertise, and who has a stake in the next generation of medical technology.
A strong domestic biotechnology sector supports skilled jobs, research capacity, and resilient access to medicines and vaccines. If we weaken that sector without slowing the development of sensitive technologies abroad, we may leave the country less secure.
Treasury and Congress should refine the approach before it is finalized. The intent of the legislation is to make our country more secure but the practical application of what is being proposed undermines the intent. Good intentions, though, are not enough. A policy that restricts American companies while leaving foreign competitors free to act could strengthen the very rivals it is meant to outpace. What is needed is a better approach.
We must apply comparable standards across the market. Foreign companies selling biopharmaceutical products in the United States should face comparable limits on covered biotech transactions, so the rule doesn’t simply shift opportunities from U.S. firms to overseas competitors.
In addition, we need to focus restrictions on genuinely dangerous biotechnology by narrowing the rule to the technologies that pose clear national security risks, rather than sweeping in broad areas of drug research and development.
Let’s also start with reporting rather than blanket bans and let’s keep U.S. companies on equal footing. Finally, we need to create a timely path for beneficial deals and track the rule’s effects and make adjustments by requiring Treasury to regularly compare its impact on U.S. firms and foreign competitors and revise the biotech provisions if they unfairly disadvantage American companies.
We must protect the country’s security without surrendering its leadership in biotechnology. The public comment period closes December 7, 2026. (public-inspection.federalregister.gov). I urge Congress and the Treasury to enact rules that preserves our national security while also allowing American innovation to flourish. Both goals are not mutually exclusive. They can and will be achieved with the right policies in place.
OpEd: Treasury’s Outbound Investment Rule Risks Giving America’s Competitors an Unintended Gift
