Trump’s ‘Foreign Adversaries’ Trade List Includes Macau

Posted on: February 24, 2025, 01:08h. 

Last updated on: February 24, 2025, 01:30h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Trump wants to limit China investment in US
  • Macau could feel effects, but impact still unclear

Macau, the world’s largest casino market, could feel collateral effects in a potential US/China trade war.

Donald Trump Las Vegas Nevada
President Trump on Inauguration Day in January 2025. Macau is included on his list of foreign adversaries regarding trade. (Image: Reuters)

Last week, President Trump pushed the Committee on Foreign Investment in the United States (CFIUS) to implement investment conditions on countries deemed to be “foreign adversaries” — a group headlined by China. By way of China’s inclusion on the list, Hong Kong and Macau are also part of it. The group is also comprised of Cuba, North Korea, Russia, and Venezuela. Trump wants CFIUS to use the legal tools at its disposal to limit Chinese investment in the US, particularly in areas such as agriculture, real estate, and technology.

The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) provides CFIUS with the grounds needed to limit foreign investment in the US.

FIRRMA strengthens and modernizes CFIUS to address national security concerns more effectively, including by broadening the authorities of the President and CFIUS to review and to take action to address any national security concerns arising from certain non-controlling investments and real estate transactions involving foreign persons,” according to the Treasury Department.

In a memo titled “America First Investment Policy” sent to CFIUS officials last Friday, Trump emphasized that US economic and national security are jeopardized by China leveraging investments in the US to bolster its intelligence and military capabilities.

How Macau Figures Into CFIUS Effort

The inclusion of Hong Kong and Macau on the foreign adversaries is almost certainly the result of those being Chinese territories. Macau itself doesn’t directly invest in the US.

However, three of the six Macau concessionaires — MGM China, Sands China, and Wynn Macau — are subsidiaries of US-based companies. The other three — Galaxy Entertainment, Melco Resorts & Entertainment, and SJM Holdings — don’t conduct business in the US though Melco trades on the Nasdaq.

It’s not clear if the US-based Macau operators could be adversely affected by Trump’s directive to CFIUS to limit Chinese investment in the US. That likely depends on the intensity of a US/China trade war and how the former goes about limiting the latter’s investment opportunities.

There is, however, some precedent for Trump’s targeting of China negatively affecting shares of US-based Macau operators. Those stocks tumbled when the president went after China during his first term, drawing rebuke from then Las Vegas Sands Chairman and CEO Sheldon Adelson.

Macau Casinos Not Focus of Trump Effort

Trump, himself a former casino owner, isn’t targeting the Macau gaming industry in his trade barbs against China. That sector isn’t a contributor to the $295 billion trade deficit the US faces with China.

Rather, the president, who previously threatened tariffs as high as 60% on Chinese imports, wants to prevent the Chinese government and companies acting on its behalf from gobbling US farmland and exploiting US innovation in areas such as biotechnology and semiconductors, among others.