OTTAWA — The United States’s allied trading partners are digesting President Joe Biden’s executive order restricting American investments in Chinese companies involved in artificial intelligence, quantum computing or semiconductors. Here’s what you need to know:

The order: The text of Biden’s order doesn’t specify the investments the U.S. will forbid or limit in the world’s second-largest economy, but it targets key things that venture capitalists and private equity investors try to give their portfolio companies: “enhanced standing and prominence, managerial assistance, investment and talent networks, market access and enhanced access to additional financing.”

The order directs Treasury Secretary Janet Yellen to issue the details of the regulations; her department wants comments from stakeholders within 44 days.

Harder than it looks: Defining a Canadian, Chinese or U.S. company could be a challenge. Privately held AI drug-discovery company Insilico, for example, has offices in Hong Kong, New York, Montreal and Abu Dhabi and has raised hundreds of millions of dollars from venture investors around the world, including from the U.S., China and China-based affiliates of Western firms.

Insilico didn’t reply to a query from The Logic. Some have speculated that China-based firms could hurry to go public, if Yellen’s regulations don’t cover shares traded on open markets.

Ottawa is monitoring: The departments of innovation, finance and global affairs have all been in “close contact with their U.S. counterparts,” according to Audrey Champoux, a spokesperson for Innovation Minister François-Philippe Champagne. “We will continue to monitor any potential impacts for Canadian companies as this situation unfolds.”

Champoux wouldn’t say whether the Liberal government has considered following the U.S. move. The Investment Canada Act that Champagne oversees is in the middle of an overhaul but it’s concerned with foreign investments into Canada, not outbound money.

The U.K. government was similarly non-committal.

What the ban could mean here: Canada should “try to conform to the U.S. rules,” said Mark Warner, principal at MAAW Law, which focuses on international investment and regulation. But he expects Ottawa to play for time as Washington frames the new requirements. Canada could also try to extract concessions from the U.S. on other trade issues, despite the bipartisan consensus on China-tied investment there, Warner said. 

Any follow-on actions from Ottawa may not have much effect, said Subrata Bhattacharjee, chair of the foreign investment review group at BLG. “The Canadian government considering imposition of a similar measure vis-a-vis China may be interesting signalling, but could not have the same practical impact as the U.S.”

Canada has a smaller tech sector and lacks the semiconductor, chemical and IT giants that tend to make large overseas investments, he said. There’s also no real Canadian equivalent of Menlo Park, Calif.-based Sequoia Capital, which is cutting its China fund loose.