Many Americans are pushing for more economic self-reliance, and lawmakers are responding with policies to bring manufacturing back home, protect supply chains, and boost local innovation. These steps make sense, and variations on policies to achieve these goals have been around since 1791, when Alexander Hamilton as the secretary of Treasury advocated for government support of manufacturing to ensure economic self-sufficiency and national security. But we must be careful not to let caution turn into isolation. Foreign direct investment (FDI) has always been a key part of America’s economic success, and it’s still vital for our growth, innovation, and global strength.
As we work to strengthen American technology and manufacturing, we must remember that the U.S. doesn’t stand alone. Foreign investment drives research, creates jobs, and helps us stay competitive through global partnerships. This doesn’t mean we ignore national security. With smart policies and strong oversight, we can protect our interests while still welcoming the benefits of investment.
Nowhere is this more apparent than in the field of technology and innovation. Although America is a global leader, we have always benefited from contributions made beyond our borders. Foreign firms investing in research and development bring fresh ideas, capital, and competitive pressure that propel our own innovation forward.
National security concerns are real, especially with countries like China. Equipment from companies like Huawei can pose serious risks, especially when it’s sold through third countries to hide where it really comes from. That’s why efforts like “rip and replace” are important to protect our networks. But instead of banning everything across the board, we need smart, targeted actions that address real threats without shutting out all foreign investment.
Beyond innovation, FDI plays a critical role in job creation and economic revitalization. Foreign-owned firms employ nearly 8 million American workers. These jobs often land in regions struggling to keep pace with the global economy, particularly in manufacturing and infrastructure.
In a race for technological leadership, nations that isolate themselves risk falling behind. Strategic alliances between the U.S. and foreign firms illustrate how international cooperation can accelerate innovation and bolster market leadership.
Certain sectors, however, demand a heightened degree of scrutiny. Clean energy, for instance, is an area where the U.S. desperately needs scale, and foreign capital can help expand solar, wind, and battery storage technologies. But as these industries become more integral to national infrastructure, we must ensure that they remain under U.S. control, especially when it comes to the management of critical energy grids.
Similarly, in advanced manufacturing and semiconductor production, FDI is helping to reshore operations. However, the risks of technology transfer and intellectual property theft remain high; therefore, protective measures must be in place to guard against leaks to foreign governments.
The health care and biotechnology sectors are also ripe for foreign investment, enhancing our ability to respond to public health crises and advance pharmaceutical development. However, these benefits must be weighed against the need to protect sensitive genetic and health data. Data security in the biotech space should be treated with the same seriousness as cybersecurity in the defense sector.
Infrastructure modernization is another area where foreign companies have brought expertise and capital to American soil. Many international firms have helped rebuild American rail, shipping, and smart city projects. As with energy, though, the key is ensuring U.S. control over the networks that form the backbone of our economy.
There are also sectors where caution must give way to unequivocal security measures. In defense and aerospace, the stakes are too high to allow foreign ownership of firms involved in military technology. Incidents like the attempted acquisitions by Chinese interests serve as warnings of how quickly sensitive capabilities can be exposed.
The same vigilance is needed in telecommunications and artificial intelligence. As our communications networks evolve with 5G and cloud computing, we must guard against foreign firms (especially those linked to adversarial states) gaining control over data networks. Companies like ZTE, China Mobile, Huawei, and Applovin have raised credible concerns among security experts, and these concerns should guide our regulatory framework.
Perhaps most overlooked (but no less important) is America’s agricultural sector. Foreign control over food production and supply chains is a national security issue, not just an economic one. We need to begin thinking about farms and food the way we think about ships and satellites. Pending legislation like the Foreign Adversary Risk Management Act and mechanisms like the Committee on Foreign Investment in the United States (CFIUS) are critical tools to assess and address these risks.
Ultimately, foreign direct investment and national security are not mutually exclusive. With targeted restrictions on sensitive industries and open channels for investment from allies and trusted partners, we can secure our economy and our future. The key is discernment. We should be welcoming opportunity where it helps and draw a hard line where it can harm.
America remains the most attractive destination in the world for investment. Let’s not squander that advantage. We can protect our interests without retreating from the world stage. In fact, doing both is not only possible, but essential.
Gary Sumihiro is the founder of Sumihiro Investments and on the board of EUCAST Global. Mr. Sumihiro is a technology judge for the U.S. Commerce Department’s SelectUSA May 11–14, 2025.
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