Citing National Security Concerns, Trump Blocks Takeover of Qualcomm by Broadcom

President Trump has blocked the proposed takeover of Qualcomm Incorporated by Singapore-based Broadcom Limited, and it’s all about 5G.

Claiming that such a buyout “threatens to impair the national security of the United States,” Trump issued an Executive Order immediately halting any further negotiations. This comes straight on the heels of a massive tariff on imported solar panels, a move aimed squarely at the People’s Republic. And for those paying attention, this is hardly surprising.

Candidate Trump criticized China early and often. Back in 2015, Trump claimed that China has “destroyed entire industries by utilizing low-wage workers, cost us tens of thousands of jobs, spied on our businesses, stolen our technology, and have manipulated and devalued their currency, which makes importing our goods more expensive – and sometimes, impossible.”

And one of Trump’s most infamous post-election Tweets foretold the recent tariff:

This time, it’s not about cheap solar panels, but the possibility of Beijing gaining the upper hand in the 5G race. As Stifel analyst Kevin E. Cassidy pointed out, “Qualcomm … is well ahead of foreign and domestic competitors” in 5G cellular technology, and the Committee on Foreign Investment in the US (CFIUS) claimed that a takeover by Broadcom would reduce Qualcomm’s “long-term technology competitiveness and influence,” significantly impacting US national security.

Overzealous much? Hard to tell, but 5G will definitely form the crux of many emerging technologies, including the fabled Internet of Things. Broadcom’s acquisition of Qualcomm would give China a huge foot in the 5G door. Any takeover would also threaten Qualcomm’s close relationship with the US military.

The Executive Order also prohibits Broadcom’s director nominees from standing for election as directors of Qualcomm.

Read more here: https://www.whitehouse.gov/presidential-actions/presidential-order-regarding-proposed-takeover-qualcomm-incorporated-broadcom-limited/