Trump Admin Blocks Computer Chip Manufacturer’s Sale to Chinese Investors
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What’s the story?
The Trump administration on Wednesday blocked the $1.3 billion sale of a Lattice Semiconductor, an Oregon headquartered computer chip manufacturer, to a Chinese investment fund because of national security concerns.
Treasury Secretary Steven Mnuchin chairs the Committee on Foreign Investment in the United States (CFIUS), which recommended the deal be blocked because of "the importance of semiconductor supply chain integrity to the U.S. government, and the use of Lattice products by the U.S. government."
Why does it matter?
According to The Oregonian, Lattice Semiconductor’s computer chips are typically used in consumer products and industrial and networking equipment. Defense represents a small portion of Lattice’s total business.
Canyon Bridge, the Chinese investment fund that hoped to acquire Lattice, said it was "disappointed by today’s decision by the President of the United States to forgo what we believe to be an excellent deal for Lattice’s shareholders and its employees by expanding the opportunity to keep jobs in America."
Since the enactment of the Exon-Florio Amendment in 1988 as part of the Defense Production Act, all foreign investments that might affect national security can be reviewed by the CFIUS and blocked by the president if "there is credible evidence... that the foreign interest exercising control might take action that threatens to impair the national security."
A June 2017 report prepared by the Congressional Research Service notes that there have only been three instances of presidents blocking deals on national security grounds prior to this week’s decision involving Lattice:
1990: President George H.W. Bush directed the China National Aero-Technology Import and Export Corporation to divest its acquisition of MAMCO Manufacturing.
2012: President Barack Obama directed the Chinese-owned Ralls Corporation to divest itself of an Oregon wind farm project.
2016: Obama blocked the Chinese firm Fujian Grand Chip Investment Fund from acquiring Aixtron, a German-based semiconductor firm with U.S. assets.
What do you think?
Was the Trump administration right to block the deal, or should it have been allowed to go through? Is it wise for the executive branch to have the power to block business transactions like this on national security grounds?
Tell us in the comments what you think then use the Take Action button to tell your reps!
— Eric Revell
RELATED READING
"Trump shuts down Lattice Semiconductor’s $1.3 billion sale to Chinese investors" - The Oregonian
"The Committee on Foreign Investment in the United States (CFIUS)" - Congressional Research Service
(Photo Credit: matejmo / iStock)
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