Last month, reflecting on the trends we were seeing in the U.S. national security regulatory landscape in the early months of the Trump Administration, we noted a continued focus on China risk and indicated that we expected the U.S. government would likely continue expanding its national security regulatory authority with respect to PRC entities. Last week, two public developments illustrated this continuing focus and the elasticity—and political character—of the approach of the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) to perceived risks from China.
Specifically, President Trump issued an order requiring that Chinese company Suirui Group Co., Ltd. and its majority-owned subsidiary Suirui International Co., Limited (together, “Suirui”) divest their interest in Jupiter Systems, Inc. (“Jupiter”), a U.S. company that provides video wall displays, including to the U.S. intelligence community. This is the first such divestiture order issued by President Trump in his second administration.
In parallel, the U.S. Department of Agriculture (“USDA”) released a National Farm Security Action Plan (the “Action Plan”), a pillar of the “Make Agriculture Great Again” initiative, aimed at securing the agricultural industry against foreign adversaries, including China. We describe each of these developments and our key takeaways for investors and U.S. businesses below.
Jupiter Systems Divestment Order
As noted above, on July 8, 2025, President Trump ordered the divestment by Suirui of Jupiter pursuant to his authorities under Section 721 of the Defense Production Act of 1950, as amended, the CFIUS authorizing statute (the “Order”). (Interestingly, while the Order was signed on July 8, the Treasury Department, as chair of CFIUS, only formally announced the Order on July 11.) The Order requires Suirui to divest Jupiter—including all tangible and intangible assets or property, wherever located—within 120 days.
The Order underscores CFIUS’s broad authority to reach back and review transactions that were not notified to the Committee, even after many years, and to compel a reversion to the pre-transaction status quo. Suirui’s acquisition of Jupiter closed in February 2020, and the Order requires divestment by Suirui of its interests and rights in Jupiter and all of Jupiter’s tangible or intangible property wherever located, including outside the United States (except for certain assets and operations of Jupiter’s Chinese subsidiaries that were demonstrably acquired or created after the transaction). It also requires destruction or transfer of all intellectual property or non-public source code associated with Jupiter products in Suirui’s possession or control. This return to the status quo ante echoes the 2012 divestiture order issued by President Obama, in relation to wind farms acquired by the Ralls Corporation and its affiliates; that order required the project companies to remove all development that had taken place up to the time of the order at the project locations, down to and including the concrete foundations.
The Order also reflects, however, an expanding use of CFIUS authority to promote strategic decoupling between the United States and China—not only by blocking inbound Chinese investments in sensitive sectors, but also by requiring U.S. companies under review by the Committee to take steps to address national security concerns arising from their Chinese operations. Specifically, the Order prohibits Jupiter from retaining any “interests or rights in any assets or operations of [its Chinese subsidiaries] acquired or created after the completion of the [t]ransaction.” Given that more than five years have passed since the transaction closed, separating Jupiter’s pre- and post-transaction China assets and operations—and demonstrating that separation to CFIUS’s satisfaction—may be time-consuming and costly.
Foreign investors and U.S. businesses should view the Order as a clear warning about the risks of proceeding with transactions within CFIUS’s jurisdiction without filing with the Committee. This is especially true where, as here, the U.S. business appears to have served critical infrastructure and U.S. government customers, including the national security community. Investors should not assume that a lack of prior outreach from CFIUS immunizes a transaction from future review or action, even if the U.S. business has evolved considerably since the transaction or the threat from the foreign ownership may have already materialized. Rather, investors should bake CFIUS diligence and contingency planning into the early stages of their deal process to minimize the risk of costly surprises years later.
National Farm Security Action Plan
Also on July 8, 2025, the USDA released its Action Plan on farm security. The Action Plan declares that “farm security is national security,” and highlights a broad array of risks to national security arising from agricultural supply chain attacks, cyberoperations targeting food processors, unfair trade practices, and the smuggling of potential bioterrorism agents, among others. The Action Plan defines “foreign adversaries” to include, at a minimum, China, Russia, Iran, and North Korea, and emphasizes China in particular through a featured map showing Chinese-owned farmland and its proximity to U.S. military installations.
With respect to CFIUS, in furtherance of the Action Plan, USDA signed a joint Memorandum of Understanding with the Department of Treasury “to ensure regular coordination . . . related to CFIUS reviews concerning covered foreign transactions that involve farmland, agricultural businesses, agriculture biotechnology, or the agriculture industry.” In practice, this simply formalizes what already was customary for CFIUS when reviewing investments in the agricultural sector—namely, in those cases, Treasury, as chair of CFIUS, has included the Department of Agriculture as a member agency of such reviews. (In much the same vein, CFIUS will include the Department of Health and Human Services, which otherwise is not a voting member agency, when reviewing transactions in the health care or life sciences sectors.)
More broadly, the Action Plan articulates three strategic objectives: (1) Promote Agricultural and Economic Prosperity; (2) Defend the Foundations of Agriculture and Food; and (3) Strengthen Domestic Agricultural Productivity.
- Promote Agricultural and Economic Prosperity: This pillar aims to: (1) secure and protect American farmland, (2) enhance agricultural supply chain resilience, and (3) safeguard the U.S. nutrition safety net from fraud, abuse, and foreign adversaries. It identifies foreign ownership of land—particularly by nationals of countries like China and Russia—as “a potential threat to national security and future economic prosperity,” and seeks “to end the direct or indirect purchase or control of American farmland by nationals from countries of concern or other foreign adversaries,” including not only through executive action but also coordinated action with Congress and state legislatures.
- Defend the Foundations of Agriculture and Food: This pillar focuses on: (1) enhancing research security and (2) aligning USDA programs with the Trump Administration’s America First policies. As part of this pillar, the Action Plan intends to protect “U.S. dominance in the global agricultural sector,” by limiting the involvement of foreign adversaries in USDA-funded research. Moreover, USDA will “eliminate all agreements—both funded and unfunded—going to people and entities from countries of concern or other foreign adversaries.”
- Strengthen Domestic Agricultural Productivity: This final pillar seeks to: (1) safeguard plant and animal health and (2) protect critical infrastructure. It emphasizes improved government readiness for biosecurity threats and enhanced information-sharing regarding cybersecurity threats.
The Action Plan reinforces agriculture as a sector of interest to the national security community and the Trump Administration broadly (it was announced by the Secretary of Agriculture in a joint press conference with the Secretaries of Defense and Homeland Security and the Attorney General). Specifically, it indicates a more concrete and defined national security interest in land based on the land’s agricultural use, in contrast with previous national security interests in land grounded in the land’s proximity to sensitive government locations. And, it reinforces the potential vectors of a transaction that may be seen to implicate national security, such as U.S. government grants or contracts and sensitive technologies (including bioagents) and related research and development, as well as the need for parties to explore the ways in which those vectors may manifest in sectors outside of those traditionally thought of as critical infrastructure (e.g., energy or telecommunications) or with the greatest nexus historically to national security such as defense, intelligence, or law enforcement.
If you have any questions concerning the material discussed in this client alert, please contact the members of our CFIUS practice.
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