A Chinese state-owned firm attempted to acquire an American semiconductor manufacturer but President Donald Trump was quick and decisive to block the move declaring it would be against the national security concerns of the U.S. Beijing was irked by the counter-move of Trump.
The U.S. Treasury Department said in a statement that the acquisition of Lattice Semiconductor Corporation, a public-traded Oregon company by Chinese-owned Canyon Bridge Fund could endanger the American government’s use of sensitive products that the company produces.
Trump decided with authority that the Lattice, CFIUS transaction “poses a risk to the national security of the United States that can not be resolved through mitigation.”
Trump’s decision also prevented Canyon Bridge, its partner Yitai Capital and Yitai’s parent, the China Venture Capital Fund Corp (CVCF) from buying the American firm which serves the consumer, communications and industrial markets.
The U.S. treasury explained that such a deal posed a threat to national security due to several factors including Beijing’s support for the said transaction, the potential transfer of intellectual property to the foreign investors, and the importance of the semiconductor supply to the U.S. government, including Lattice’s products.
President Trump has the authority under the law to prevent foreign investments which he thinks will become national security threats through the Committee on Foreign Investments in the U.S., an interagency committee.
China has expressed its disagreement with Trump’s move as its Ministry of Commerce expressed “concern” over the decision Thursday. Its spokesperson Gao Feng said at a press briefing that while each country has a right to probe investments in “sensitive fields”, he said such power should not be used as “an instrument for implementing protectionism.”
China has also asked for relevant countries to treat Chinese companies’ foreign acquisitions “objectively and impartially.”
President Trump has always taken an aggressive stance on China on trade and national security matters. His administration has launched wide-ranging investigations into the national security impact of China’s trade in aluminum and steel.
Lattice manufactures programmable logic devices, which are semiconductors that can be programmed to carry out tasks similar to chips.
Trump decisively stepped in the process after the American companies appealed to him personally to overrule the CFIUS decision.