WASHINGTON, U.S. - In what came as the first clear sign to China from the U.S. that it would block any deals that involve technologies with potential military applications, on Wednesday, U.S. President Donald Trump blocked an important deal.
Trump barred a Chinese state-owned firm, Canyon Bridge Capital Partners’ from acquiring American semiconductor manufacturer Lattice Semiconductor, in a planned $1.3-billion acquisition.
This was one of the largest acquisition attempted by a Chinese-backed firm in the U.S. chip sector.
Launched in 2016, Lattice Semiconductor Corporation, a publicly-traded Oregon company is focussed on “manufacturing programmable logic devices, which are semiconductors that can be programmed to provide functions similar to chips.”
Trump blocked the deal saying it posed a threat to U.S. national security.
The Treasury Department said in a statement that the acquisition of Lattice Semiconductor by Chinese-owned Canyon Bridge Fund could endanger the U.S. government's use of sensitive products the company produces.
Since the start, the Trump administration has adopted an aggressive stance towards China on trade and national security matters.
Washington even launched wide-ranging investigations into the national security ramifications of Beijing's trade in aluminum and steel.
The decision on Lattice’s acquisition was made by Trump, who has the authority to block foreign investments that he deems are national security threats, through the Committee on Foreign Investments in the United States (CFIUS), an inter-agency committee.
The Treasury said in a statement that they decided "the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation.”
The department further added that the deal posed a national security risk due to “Beijing's support for the 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.”