On Monday President Donald Trump blocked the bid of $117 billion by Broadcom to acquired chipmaker Qualcomm, citing concerns over national security and sending out a clear message that he will take extraordinary measures to promote the increasingly protectionist posture of his administration.
Through a presidential order, Trump said that there existed credible evidence that led him to believe if Broadcom, which is Singapore-based, were to take over control of Qualcomm, it might carry out action that would threaten impairing the U.S. national security. If the acquisition would have gone through, it would have represented the largest tech deal ever.
Trump’s decision prohibiting the huge deal underscores the length he will go to shelter companies in the U.S. from competition by foreign companies. Over the last few weeks, Trump has used several different tools including implementing tariffs and an obscure review panel, to head off foreign control in industries across the U.S., and in particular fend off the rise of China.
Trump has placed focus on the tech industry for many of his actions. While the U.S. long held what it calls an advantage when it comes to tech, it now is facing strong rivals from China, where big investments have been made by the government in things from artificial intelligence to wireless networks to semiconductors.
Through actions taken recently, the Trump administration has shown its opinion that the national security of the country is linked to the advancement of the same technologies.
National security also was cited by Trump a week ago when he approved the sweeping and stiff tariffs on aluminum and steel imports, saying the imports threatened American manufacturing.
Trump spoke of Chinese steel as an important factor for his decision. Previously he said that China routed steel into and out of other countries and then flooded the U.S. with the cheap metal.
Trump gained an opening to block the bid by Broadcom to acquire Qualcomm earlier in March, after the Committee on Foreign Investment in the United States (CFIUS), which is a government panel typically working in private reviewing deals only after they have been announced, said it would be stalling the bid by Broadcom because of concerns over national security while it looked further into the deal.
Broadcom announced it was carrying out a review of the order made by Trump and disputed any notion that its bid represented a threat to national security.