Republican Lawmakers Are Working On A Bill That Would Require Foreign Subsidies.

The law, led by MP Scott Fitzgerald, R-Wisc., tentatively titled "The Termination of the Foreign Government Incorporation Subsidy Act," states that state-sponsored companies must notify regulators of the assistance if they receive one transaction report worth more than $92 million.

This additional information could help regulators assess how a company might act after a merger, Republican federal trade commissioner Noah Joshua Phillips, who backed the legislation, said in an interview with CNBC on Wednesday.

Federal Trade Commission Commissioner Noah Phillips testifies during a Senate Committee on Commerce, Science, and Transport hearing highlighting the invalidity of the EU-US Privacy Shield and the future of transatlantic data flows in the Russell building.

"Our legal assumptions and way of working are based on the idea that the company achieves maximum profit. "You're trying to make money," Phillips said. "But government agencies don't always seek profit as a last resort and may not act in the same way as companies we normally see."

Companies that value specific policy objectives over profits may make different calculations when it comes to the risks of engaging in anti-competitive behavior, such as: While Phillips refuses to speculate on the behavior of government organizations, he said it would be helpful to know his potential incentives to evaluate facts on a case-by-case basis.

Regulators can now find out about foreign government subsidies in the event of a merger. Still, Phillips said advance notice would allow them "to develop expertise and ask the right questions."

The bill builds on recommendations by the bipartisan US-China Economic and Security Review Commission last year. In its annual report to Congress, the committee recommended that the FTC have a system to determine how much foreign government support would affect proposed transactions.

The Commission has found that the Chinese government will support companies it considers national champions and ultimately encourage them to expand into the United States and other countries.

The Commission said that "China's trade distortion practices" mean that "US workers and companies, no matter how innovative and efficient they are, will compete if the Chinese government regulates terms through various legal, regulatory and financial mechanisms that support Chinese companies.", and giving American companies access to the Chinese market came at the expense of transferring valuable intellectual property to their Chinese counterparts."

The group warns that the risks are acute with new technology, with China seeking to "outperform and overthrow the United States as a whole."