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Subject

Government intervention in foreign inward and outward investments and mergers.

Significance

The Trump administration is increasingly moving to control undesired foreign investments, as the March 12 presidential order blocking overseas-based Broadcom from merging with US-based Qualcomm showed. President Donald Trump was working on advice from the Committee on Foreign Investment in the United States (CFIUS). Since 1990, there have been only five cases where presidents have blocked mergers; two of these have been under Trump since his inauguration in January 2017.

Impacts

Foreign firms will face constraints on accessing US intellectual property and tech patents.

Trump will impose new visa requirements for Chinese nationals working and studying in the United States.

US vetoes of foreign investment and mergers could see other countries respond in the same way.

The Broadcom-Qualcomm veto should help the US semiconductors industry maintain a global role in 5G technology.

Foreign firms may sidestep the CFIUS by incorporating in the United States, as Broadcom hopes to do next month.

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