On Friday, July 11th, the United States Department of the Treasury stated that President Trump issued an executive order prohibiting a Hong Kong company named Suirui International Co., Limited from acquiring Jupiter Systems, a visual and audio equipment supplier in Delaware state.
According to the statement, the majority of shares in Suirui International are owned by Suirui Group Limited, which is registered under the laws of the People’s Republic of China (PRC).
The Committee on Foreign Investment in the United States (CFIUS) under the U.S. Department of the Treasury conducted a review and investigation of this transaction under the amended Section 721 of the Defense Production Act of 1950. CFIUS determined that Suirui International’s ownership of Jupiter poses a national security risk, especially since “Jupiter Systems’ products are used in military and critical infrastructure environments, posing potential leakage risks.”
Jupiter Systems primarily provides video wall technology widely used in defense, energy, and transportation sectors, making the sensitivity of the company’s technology a focal point of the review.
Suirui International has described itself as a cloud communication service operator.
The two companies reached an agreement in early 2020. President Trump’s executive order requires the Hong Kong-based company to divest from the U.S. company within 120 days.
The U.S. Department of the Treasury stated that, “To address this risk, the President’s executive order directs Suirui to divest all interests and rights in Jupiter Systems and mandates that Jupiter Systems may not hold any interests or rights in Chinese subsidiary assets or businesses acquired or created after the completion of the transaction.”
The U.S. government has long viewed the Chinese Communist Party (CCP) as a major security threat. Over the years, tensions between the U.S. and China have persisted on issues such as trade tariffs, technology, cybersecurity, and geopolitical matters.
On February 21st this year, President Trump signed an investment memorandum instructing the Committee on Foreign Investment in the United States to restrict Chinese investment in strategic areas. A White House official at that time stated that the memorandum aimed to promote foreign investment while protecting U.S. national security interests from threats posed by China (CCP) and other foreign adversaries.
According to the memorandum, the President instructed the formulation of new rules to curb Chinese and other foreign adversaries from utilizing U.S. capital, technology, and knowledge, ensuring that only investments aligning with U.S. interests are permitted.
The memorandum explicitly states that the U.S.’s “foreign adversaries” include China, including Hong Kong and Macao, Cuba, Iran, North Korea, Russia, and Venezuela.
According to data from the Rhodium Group, Chinese investment in the U.S. has decreased significantly from $46 billion in 2016 to less than $5 billion in 2022.