Home Business Trump Blocks the Sale of an American Company

Trump Blocks the Sale of an American Company


In a rare move, President Trump refused to allow the acquisition of an American semiconductor company by China-backed investors. The president said that the deal raised some national security concerns. This latest move could be the beginning of aggressive scrutiny involving deals between the US and China. The deal that involves Lattice Semiconductor threatened to cast a strain on the diplomatic and economic relations with the Far East country. President Trump began criticizing China during his campaign where he accused them of stealing American jobs. He has upgraded his criticism by accusing China of doing nothing in stopping North Korea from manufacturing nuclear weapons. An American Enterprise Institute scholar Derek M. Scissors who specializes with Chinese investments said that the decision by the Trump administration was a political message. By letting the Lattice deal collapse, the US government showed China they were willing to let the company die. However, they went a further step by killing it loudly. The Trump administration said on Wednesday that it could not allow the deal to go through considering that the US government relies on semiconductors from this company. At the same time, the US government said that some of the major shareholders had close ties to Beijing. The US government was referring to the China Venture Capital Fund Corporation. According to the White house, some of its stakes are owned by the Chinese government.

This serves as a beginning for Chinese companies wishing to conduct business in the United States. The United States Committee on Foreign Investments is keen than before. This is a multi-agency group that has been established by the US government to scrutinize the takeover of American entities by foreign investors. They answer to the president of the United States. The group is known to operate in secrecy. At the moment, it’s being rumored that the agency is looking into the proposed takeover of MoneyGram International by a Chinese firm known as Ant Financial. The Ant Financial happens to be an affiliate of the Alibaba Group. As Chinese companies look to diversify outside China, they are looking to make deals in Europe and USA. However, these deals have surged in the last few years in America. According to Rhodium Group that specializes in research, Chinese investment has risen fivefold from 2015. 2017 has seen an investment of $46 billion in the US alone. China has been accused of targeting the technology industry in these investments.