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Trump blocks Chinese deal to buy USA chips with military uses

14 September 2017

In the case of Lattice, CFIUS and the president decided "the transaction poses a risk to the national security of the United States that can not be resolved through mitigation", the Treasury said in a statement.

American presidents are empowered to stop the sale of domestic companies to foreign buyers if there is a potential threat to national security - either because of what the USA company does, or due to the nature of the would-be buyer.

Mnuchin added that the national security risk was related to the transfer of intellectual property, the Chinese government's role in supporting the deal, the importance of semiconductor supply chain integrity to the USA government and the US government's use of Lattice products.

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However, it was rejected by the Committee on Foreign Investment in the United States (CFIUS) after several months of persuasion by both parties to clear the acquisition.

The White House said on Wednesday that it prevented the acquisition of Lattice Semiconductor, in part because the United States government relies on the company's products. Other Chinese deals under review include MoneyGram International Inc.'s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma.

The White House also raised concerns over the buyer's close ties to Beijing. Soon after the deal was announced, several lawmakers argued the deal should be killed because the chips are key to certain US military applications.

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The company did not have a comment on the decision at press time.

In this instance, Lattice and Canyon Bridge refiled three times without winning approval before making the unusual decision to appeal to Trump in hopes of winning him over with a pledge to save jobs.

The decision prohibited Canyon Bridge, its partner Yitai Capital and Yitai's parent, the China Venture Capital Fund Corp (CVCF), from purchasing the United States firm, which serves the consumer, communications and industrial markets.

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Lattice had said that Canyon Bridge now employs 300 people in OR - and Canyon Bridge has committed to adding 350 more if the takeover deal went through.

Trump blocks Chinese deal to buy USA chips with military uses