President Barack Obama blocked a Chinese-led group from purchasing several wind farms near a US naval station Friday, saying the acquisition threatened national security.
Obama cited "credible evidence" that the corporation linked to Chinese nationals "might take action that threatens to impair the national security of the United States."
According to US officials, the wind farm sites are all within or near restricted air space at an Oregon naval weapons system training base.
The president's decision requires the Ralls Corporation, which has the Chinese company Sany Group as a subsidiary, and other Chinese nationals to cancel within 90 days their deal.
"The companies, and any persons acting for or on behalf of the companies, including officers, employees and owners, shall cease all access, and will not have any access, to the properties," the order said.
It blocked Ralls's purchase of the Lower Ridge Windfarm, High Plateau Windfarm, Mule Hollow Windfarm and Pine City Windfarm.
Ralls is incorporated in Delaware, but controlled by Chinese citizens through the Sany Group, according to US officials.
"Ralls Corporation is owned by Chinese nationals, and is affiliated with a Chinese construction equipment company that manufactures wind turbines," a US Treasury statement said.
"The wind farm sites are all within or in the vicinity of restricted air space at Naval Weapons Systems Training Facility Boardman in Oregon."
Obama made the decision based on the recommendation of the Committee on Foreign Investment in the United States (CFIUS), a secretive inter-agency panel that reviews foreign acquisitions with a potential impact on national security.
Ralls said in a statement the project posed no security threat.
"We regret President Obama's order today prohibiting a jobs-creating wind farm project in Oregon," company lawyer Tim Xia said in a statement sent to AFP.
"The project poses no national security threat whatsoever, and the president's order offers no explanation otherwise."
The lawyer said the move was "without justification, as scores of other wind turbines already operate in the area where Ralls's project is located" and that the decision "drives our effort to seek redress in US courts."
Earlier this month, Ralls sued CFIUS, claiming the panel had effectively frozen the acquisition without proper authority.
Ralls said in the suit that it was "suffering legal wrong" and that CFIUS "lacks statutory authority" to prohibit the transaction, and should instead propose measures that mitigate any national security risks.
The Treasury statement said the decision to block the deal "demonstrates the administration's commitment to protecting national security while maintaining the United States' longstanding policy on open investment."
It added that the administration "will continue to ensure that the United States remains the most attractive place for businesses to locate, invest, grow and create jobs" and added that it "is not a precedent with regard to any other foreign direct investment from China or any other country."
The CFIUS panel is chaired by the Treasury secretary and includes the heads of the State, Defense, Commerce, Energy and Homeland Security agencies, along with the attorney general, the director of the White House Office of Science and Technology Policy and the US Trade Representative.
The Director of National Intelligence and the secretary of labor participate as non-voting members.