The New York Times editorial board agrees with President Donald Trump’s decision to block the massive acquisition of U.S.-based Qualcomm by a foreign company, according to an editorial Wednesday.
Headlined simply “Trump Was Right To Block Merger,” the Times explained that Trump’s pre-emptive move to prevent Singapore company Broadcom Limited’s purchase of the largest domestic semiconductor manufacturer made sense considering the sensitive nature of computer chips.
The editorial board notes, however, that Trump could use his authority to block foreign acquisitions of U.S. companies to further protectionist aims.
Trump stopped Broadcom from completing its planned hostile takeover of Qualcomm Monday after an investigation by the Committee on Foreign Investment in the U.S. (CFIUS) determined such a merger would impair national security. (RELATED: Tech Company Follows Trump’s Order, Cancels Hostile Takeover Plans)
The Times noted that in a letter from the Department of the Treasury, which oversees CFIUS, the government hinted at concerns Broadcom would break up Qualcomm’s research divisions and cede valuable strategic ground in 5G and telecommunications development to Chinese companies.
Republicans and Democrats alike appear to be united in supporting the president’s decision to block the merger. Republican members of Congress, including GOP Sens. John Cornyn of Texas and Tom Cotton of Arkansas, were among the first to urge CFIUS to investigate Broadcom’s acquisition attempts. After Trump blocked the deal, Democratic Senate Minority Leader Chuck Schumer applauded the president “unequivocally.”
“Let me say unequivocally, President Trump and his administration made the right decision on blocking Broadcom from taking over Qualcomm,” Schumer said in a Senate floor speech Tuesday.
WATCH: Chuck Schumer Praise Trump’s Decision To Block Tech Takeover
Trump was singing a different tune in November when Broadcom CEO Hock Tan visited the White House. Broadcom was battling with CFIUS over a different merger — the acquisition of U.S. company Brocade Communications Systems.
Before that Nov. 2 visit to the White House, Broadcom had withdrawn a revised application to inter-agency committee for the Brocade deal. A few weeks after the visit, when Tan promised to headquarter his company in the U.S., Broadcom announced the acquisition of Brocade was complete on Nov. 17. Even after the hostile takeover of Qualcomm was blocked, Broadcom says it plans to complete its move to the U.S.
Trump’s decision to block the Broadcom acquisition of Qualcomm could spell trouble in the future. “Seen against the backdrop of the president’s protectionist statements and policies, this decision is unnerving,” the Times wrote. Trump’s decision”could further rattle the global economy and international norms” if other countries choose to block U.S. investment as a retaliatory measure.
“Other countries might now feel emboldened to block as a security threat inbound foreign investment that they consider significant, justifiably or not,” the Times said.
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