President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE on Wednesday declined to impose executive actions to limit investments in American technology from foreign countries such as China, instead deferring to Congress to update the review process.

The announcement followed reports earlier in the week that the administration was preparing rules to block China, in particular, from making significant investments in sensitive U.S. technologies.

The stock market tumbled following the reports and administration officials rushed to deny that the actions would target China specifically.

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In particular, Trump put his backing behind the Foreign Investment Risk Review Modernization Act (FIRRMA), legislation that the administration had already signaled it supports.

"After reviewing the current versions of FIRRMA with my team of advisors — and after discussing them with many Members of Congress — I have concluded that such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity," Trump said in a statement released Wednesday morning.

FIRRMA would expand the scope of foreign investment restrictions the administration could block based on national security concerns, potentially blocking the transfer of information like personally identifiable sensitive data on individuals.

Trump threatened to use executive action should Congress fail to act.

"Should Congress fail to pass strong FIRRMA legislation that better protects the crown jewels of American technology and intellectual property from transfers and acquisitions that threaten our national security — and future economic prosperity — I will direct my Administration to deploy new tools, developed under existing authorities, that will do so globally," Trump said.

Trump's decision to back off on more immediate actions could signal a cooling of heated trade negotiations with China.

Trump earlier this month imposed tariffs on $50 billion of Chinese imports to the U.S. and threatened larger tariffs after China responded with tariffs on U.S. goods.

Treasury Secretary Steven Mnuchin Steven Terner MnuchinHillicon Valley: DOJ proposes tech liability shield reform to Congress | Treasury sanctions individuals, groups tied to Russian malign influence activities | House Republican introduces bill to set standards for self-driving cars Treasury: Trump's payroll tax deferral won't hurt Social Security Treasury sanctions individuals, groups tied to Russian malign influence activities MORE said declining the limits on investments did not constitute any sort of backing down.

"Is this us being weak on China? No," he said, adding that the legislation wasn't specifically meant to target China either.

Sen. Marco Rubio Marco Antonio RubioOvernight Defense: Pentagon redirects pandemic funding to defense contractors | US planning for full Afghanistan withdrawal by May | Anti-Trump GOP group puts ads in military papers Democrats step up hardball tactics as Supreme Court fight heats up Press: Notorious RBG vs Notorious GOP MORE (R-Fla.), who has cited China as a central strategic threat to the United States, derided the decision Wednesday as disappointing.

“Stronger CFIUS good for stopping bad deals. But some technologies critical to national security should NEVER be sold to or shared with #China. That’s why these promised restrictions are so important & why backing off on them would be so disappointing,” Rubio tweeted, referring to the Committee on Foreign Investment in the United States (CFIUS) that the new legislation would strengthen.

But industry groups were happy to hear of the approach.

“We are encouraged that the administration is focused on working with Congress to continue advancing CFIUS reform,” said Dean Garfield, president and CEO of the Information Technology Industry Council.

"Importantly, both the House and the Senate have advanced legislation to enhance our national security without unnecessarily impeding economic growth and job creation," he added.

Updated: 12:35 p.m.