Did Trump Just Put A Huge “Not For Sale” Sign On U.S. Tech Companies?
President Seems To Be Using “National Security” As Catch-All For Taking All Kinds Of Unilateral Action
He issued an Executive Order blocking a blockbuster bid by Broadcom to take over Qualcomm. That move considered highly unusual at least partly because the Singapore-based Broadcom didn’t really have a done deal yet, which would’ve valued San Diego-based Qualcomm at about $117-billion.
The Trump administration has killed a handful of technology deals since coming into office, some of them sizable, most involving Chinese companies as the purchaser (Obama had blocked sales to Chinese companies too). But as Bloomberg points out, this appears to broaden the policy to hanging a “not for sale” sign on at least semiconductor firms, and perhaps technology companies in general, even if China is not directly involved in the deal.
Even the sale of Trump’s pal and former Communications Director Anthony Scaramucci’s investment company to a Chinese firm has been hanging in the balance for months.
According to the Washington Post, in the Broadcom case, the Trump administration was concerned that if the deal went through, Broadcom could cut Qualcomm’s research and development. Because of that, China’s Huawei Technologies, could catch up and maybe even pass the U.S. in next-generation technologies. Broadcom issued a statement saying it disagrees the merger would pose any threat.
Broadcom was originally the semiconductor arm of Hewlett-Packard, and was sold a couple of years ago to a Singapore-based company, which then started using the Broadcom name. In part to avoid regulatory scrutiny, the company last year announced it would relocate to the U.S. At that time, Trump feted Broadcom’s CEO in the Oval Office.
So while Trump’s move is an unusual one, the Broadcom-Qualcomm bid itself is extremely odd. And it’s very possible the President did the right thing.
But that’s not entirely what concerns us. It’s the language we’re hearing repeatedly from Trump in justifying unilateral moves he’s making on global trade. In his executive order, Trump said the merger “threatens to impair the national security of the United States”. That’s exactly the same language — to the word — that he used when he slapped steep tariffs on imported steel and aluminum.
(And while Republicans in Congress are making a big show of steaming about Trump’s tariffs, only one, Arizona’s lame duck Jeff Flake has actually moved to curtail Trump’s authority through legislation).
Congress and the Supreme Court have historically given the President a lot of leeway in terms of administering trade policy. And almost anything involving another country can be justified in terms of “national security”, making it very hard to challenge.
“Threatens to impair the national security of the United States.” Seems Trump is becoming a big fan of that phrase. Because those words kind of give him the legal authority to do whatever he wants. At least when it comes to global business.