What a fight between phone chip companies tells us about Trump’s trade agenda.
President Donald Trump on Monday evening intervened to quash an attempt from Broadcom, an Asian chipmaker, to take over Qualcomm, its American competitor, on the grounds that it would threaten US national security. Trump’s move was unprecedented, given that the companies hadn’t agreed to a deal yet. Broadcom is trying to reincorporate as an American company, but Trump appears to be effectively taking Qualcomm off the market, even if Broadcom does come to the US.
It’s a big deal. This is the second time Trump has blocked a major international merger on national security concerns — and only the fifth time a US president has done so ever. It demonstrates that he and the authorities that oversee international deals are becoming increasingly aggressive, especially when it comes to the tech space and China, and highlights fears over the race to develop 5G networks.
The takeover saga that began in November when Broadcom began aggressively pursuing a takeover of Qualcomm. Because Broadcom is incorporated in Singapore, the potential deal was subject to the scrutiny of a Treasury Department panel, the Committee on Foreign Investment in the US (CFIUS), which vets foreign deals.
Now Trump appears to have taken the deal off the table altogether. In a statement announcing the decision, he said there is “credible evidence” that Broadcom’s potential Qualcomm takeover “threatens to impair the national security of the United States.”
“This is a pretty big deal,” Brian Fleming, an attorney at Miller & Chevalier who worked in the Justice Department’s national security division, told me. “To have it unfold the way it did so rapidly, the mechanics of it are unprecedented, the timing of it is unprecedented.”
It is only the fifth time in three decades …read more
Source:: Vox – All