Trump’s Order Stops ALL Foreign Takeovers of Large US Tech Companies

“Any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.”

President Trump signed a far-ranging executive order late Monday that blocked the $117-billion hostile takeover of Qualcomm by Broadcom, a Singapore-based company, on concerns over national security. This crushed any hopes that remained in some corners of seeing what would have been the largest tech deal ever. But the order was far broader: It blocked all such deals.

The original Broadcom was a storied American company, dating back to the 1960s when it was part of Hewlett-Packard. It was turned lose in the 1990s as part of the dismantling of H-P and IPO’ed in 1998 as one of the dotcom darlings.

In May 2015, Singapore-based chipmaker Avago Technologies announced that it would acquire Broadcom for $37 billion, the largest tech deal since the dotcom bubble. Thus Broadcom became a subsidiary of a foreign company that then took on Broadcom’s name. Then it was Qualcomm’s turn. Just imagine the fees for Wall Street, which loves these mega-deals.

But the Trump White House is not so enamored with these foreign takeovers of US tech companies. Trump’s order said this:

There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom), along with its partners, subsidiaries, or affiliates, including Broadcom Corporation, a California corporation, and Broadcom Cayman L.P., a Cayman Islands limited partnership, and their partners, subsidiaries, or affiliates (together, the Purchaser), through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States.

And it isn’t just Broadcom that is targeted with this order. It’s all foreign takeovers of large US tech companies:

The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.

The order was categorical:

The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover. Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover of Qualcomm have been completed.

It included all kinds of provisions. For example, if Broadcom tries to get cute and dodge the order in some manner, such as quickly domiciling in the US to become a US company on paper, which it has been trying to do to get around any resistance, those efforts will also be “prohibited”:

Any transaction or other device entered into or employed for the purpose of, or with the effect of, avoiding or circumventing this order is prohibited.

In a letter to the lawyers of both companies on May 5, the Treasury Department, citing CFIUS – a multi-agency panel that reviews foreign takeovers of US companies for national security considerations – had raised concerns about, among other things, China’s efforts to dominate the 5G technology:

While the United States remains dominant in the standards-setting space currently, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover. Given well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States.

In its letter to both parties on Sunday, the Treasury Department, citing CFIUS, indicated that it might soon recommend Trump prohibit the merger – which is what Trump ended up doing today. It said that Broadcom had violated repeatedly one of the panel’s orders by trying to accelerate the domiciliation without enough consultation with the US government.

This was in response to Broadcom’s announcement on Friday – fast-moving stuff! – that it would move forward a shareholder vote on its US domiciliation to March 23, from May 6, which would have allowed Broadcom to move its paper headquarters to the US by April 3, just before Qualcomm’s shareholder vote on the merger.

In doing so, Broadcom figured that it would be outside the jurisdiction of CFIUS and could dodge US government opposition. But it apparently hadn’t counted on a President that’s simply not inclined to pussyfoot around these issues.

The US trade deficit in goods and services has been deteriorating sharply since last August. And in January it got a lot worse, with impeccable timing. Read… Oops, Extra-Gloomy Numbers on the US Trade Deficit in Goods & Services for January

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  89 comments for “Trump’s Order Stops ALL Foreign Takeovers of Large US Tech Companies

  1. MCH says:

    Odd. It seems like the Americans are starting to wake up to the fact that capitalism can be leveraged as a weapon against it. Well, the Europeans are still open to this stuff at least.

    • Ed says:

      Not universally. The Germans have begun to protect their key manufacturing and robotic companies.

      The Chinese had been picking key companies from among the Mittelstand and of course transferring the technology. This alarmed the German business community and government.

    • Valuationguy says:

      While I agree with you to an extent….but there is also the fact that U.S. companies have $2+T in cash parked outside the U.S. (waiting for the recent tax break on repatriation that the tax cut gave them) which they are now looking at flowing a large portion back to the U.S. because they know that once the Dems regain office….the taxes will ramp back up.

      This $2 Trillion dollars provide a material portion of the deposit base of all those Asian (and to a less extent, European) banks and finance companies…..which is going to steadily erode now in the absence of effective capital controls as this capital flows flee to the U.S. China recognizes this….because it is a problem with its own citizens, which is why its capital controls started ramping in late 2016. Not much U.S. assets are parked in China itself but the OTHER Asian banks (Hong Kong, Japan, Korea, Singapore, etc.) where capital controls haven’t yet been implemented are going to start seeing liquidity issues….starting where they usually do….in the Emerging markets of Asia.

      Europe has similar issues (and their banks are in even worse shape in terms of cushion) but the ECB is still committed to backstopping them (at least until 2020 when Draghi leaves his unelected office). Italy of course is the wildcard here given its bankrupt finances…but very few U.S. corps are keeping money in the risky Southern European markets where the problems are worst.

      The flow of this capital back to the U.S. is going to push UP the dollar…which in turn will keep the Fed interest rates from getting too out of hand too fast and provides even MORE of an incentive to flow capital to the U.S. (preserve the purchasing power). Europe is toast imo because the ECB can’t escape purchasing gov’t debt with immediate collapse and the socialist states of Europe don’t realize they are already overextended in the promises department…..thus they extend and pretend until SOMETHING BREAKS (there IS NO VIABLE EXIT STRATEGY…)….which makes the resulting collapse 5x more chaotic.

    • d says:

      You think??

      The Germans have better manner’s than the Trump clan.

      They just start throwing word’s like Reciprocity around which they were doing before P 45 even got elected.

      china isnt listening, so they start quietly acting.

  2. Jon says:

    Would us govt stop the Chinese nationals buying properties in American cities and this pricing out locals ?

    • Kevin Beck says:

      No; the Chinese government will stop them first.

      • MCH says:

        Amen to that, Kevin. The Chinese government knows the difference between evil criminals (read, Chinese billionaires) laundering their money in the US (see one recent example: and Chinese government backed corporations buying US companies to get at their technical capabilities.

        Imagine if a consortium of Chinese companies got together to put a bid for Lockheed Martin, or Raytheon, or Apple. Bet that would raise some eyebrows, but don’t worry, government backed Chinese companies are just not that dumb when it comes to key needs. Once again, just look at the market for fiber communications equipment, and you can see how China put together a coherent and intelligent national strategy that made companies like Huawei and ZTE the defacto provider of fiber components for most of the world.

        • kevin says:

          Hahaha…you must be kidding guys. China buying Lockheed Martin? You guys simply don’t know what is really going on in the world behind “truth’s protective layers”.

          Lockheed Martin and a bunch of other companies are in on the SSP with “off-world” technologies that are at least 60 years or more ahead of China. US of A is far ahead of China in ways you cannot even begin to imagine.

          Trump is just a puppet (as is all US presidents after Eisenhower) but anyhow he is doing the right thing now and is probably being “advised” / “coerced” / “manipulated” by the military-industrial complex to keep a firm lid on some of the core technologies. Hence, no more tech companies being sold to China or any non-allied country (read non-Brit)

          If there was ever a Clash of Civilizations, China has already lost it since the 1900s. Don’t worry about China taking over the world…they have about as much of a chance to do that as Japan did back in the 70s. Lots of hype, but realistically zero probability, unless they get some favors from the Watchers.

          Let the Chinese stupidly buy all the over-priced real-estate they want now. Real estate is just “dead” money while technology and technical expertise is the source of real leverage.

          When the next crash comes, Fannie and Freddie can easily scoop back everything at depressed prices… and by then, you will realize who has been the patsy all along.

        • JZ says:

          The Chinese has been sending US goods and service for USD paper. The US citizens enjoyed the low price for the past 30years. Now the Chinese want to change the USD paper for real productive companies, the USgov will block them. Telling them to narrow trade deficit, buy American beef, NOT lockheed martin. What do you think the Chinese will do? If they can NOT own productive companies, they will buy your house, make you renter, raise your rent and let you pay 30% of your income to them. Fools will buy american goods. They buy american assets.
          Now, let’s block them from buying all American assets, how about that? be careful what you wish for.

        • David says:

          kevin — “Lockheed Martin and a bunch of other companies are in on the SSP with “off-world” technologies that are at least 60 years or more ahead of China. ”

          Q? Is that you?

      • Rates says:

        Then why are the Chinese still buying Bay Area homes? In fact homes all over the West Coast?

        • Captain Obvious says:

          Because 400k buys you a US green card and nobody us safe in Xi’s China, not even billionaires.

        • Wolf Richter says:

          I think EB-5 visas (which can lead to a green card) require a $500k “investment” in the US. But they’re not risk free for those “investors.” Google EB-5 visa fraud.

        • hendrik1730 says:

          Establishing their new colony.

        • MC01 says:

          I have a relative who got a green card through an EB5 visa, which in turn he obtained thanks to a hefty “investment” in the South Florida real estate market. He now lives in a condo where over half the residents have green cards obtained in exactly the same fashion. Their nationality ranges from Brazilian to South African.

          As Wolf Richter so wisely said it’s not a “risk free” endeavor. He got scammed twice in his quest for an EB5. One time he somehow managed to recover some of his money, the other time he was left hanging in the wind. The amount of rascality associated with the business is astonishing, as is the gullibility of the people handing huge sums of money to perfect strangers with very few, if any, written guarantees.

        • MCH says:

          Because, in the US, there is this thing called rule of law, where the government has a hard time taking away your property and money.

          In China, this can be done on whim, if comrade Xi (or more likely one of his minions) doesn’t like you, and you happen to be a mega billionaire, well, congratulations, you must be corrupt, and poof goes your cash. Much harder to reach those asset if it is in the US and surrounded by a bunch of lawyers.

          I mean, unless you think Chinese people are stupid, of course, they are going to put money is a safe haven by hook or by crook. The Chinese government might want to limit outflows, but the Chinese people in general aren’t idiots, if they have the means to put their cash in some place safe, then it’s going to get there.

          This is why people are willing to overpay for real estate. If I’m a Chinese with some money, my thinking would be, sure, I might lose 15% of the value if the real estate market in bay area goes south, but it isn’t likely to go to zero as might be the case if comrade Xi suddenly declares communism is back in vogue and your money is the people’s money.

          And in spite of all the crap you hear on the U.S. media about how the government here is racist, and for suppressing poor people, and all the social injustice, the truth is that the US is actually a decent place to live. Comparatively speaking, it is a fairly safe haven for people who has means. Lots of premium in relatively stable government, and safe environment. Also, last time I checked, the bay area or LA isn’t anywhere near as polluted as a place like Beijing where you should be wearing a mask for your own health.

    • van_down_by_river says:

      Americans have been running a huge trade deficit with China – the Chinese send tangible goods and receive only dollars in exchange. It would seem the Chinese have finally figured out the U.S. is defaulting via inflation and a panic to unload dollars has begun. Property is one of the few tangible assets the Chinese can get with their confetti dollars, so don’t expect the trend to change. The dollar loses value every day, every hour, every second. The dollar is now worth less then when I started typing. The time to panic was 10 years ago – the time to get stuck holding the bag of poop is now.

      If it gives you comfort and makes you feel safe go ahead and buy another aircraft carrier and hire some more “troops” – no shortage of dollars so party like it’s 1999.

    • Cal says:

      Dude, what do you think has been happening in San Francisco for the last half century?

      Thank L.B.J. and his ‘great society program’ for changing immigration laws.

      Google “San Francisco City Directories” and open up say 1960’s.
      Then look up “Wong.” Count the number of pages of them. Then look up the latest year available. People with Chinese surnames own the majority of property, commercial and residential, in San Francisco. Many are not citizens, but are foreign investors.

      Most expensive rents in the nation.

  3. Ken says:

    Be nice if Canada would realize this but we have an arts teacher in charge.

    • Paul J says:

      Remember in some places art has value, but in others it is often spelt with a silent “f”.

    • David says:

      We’re trading Horseface for Doug Ford in Ontario.

      We’re moving in the right direction.

  4. Lune says:

    I’m not a Trump supporter but I support this. The fact is that all these high tech companies depend on the investments we as Americans have made in university education, govt sponsored research, and even govt contracts to develop new technologies. They should not be allowed to then sell these technologies for foreign companies to exploit.

    Broadcom sold itself to Singapore. Let them develop the tech there if they don’t need access to US subsidies and govt investment to do it.

    • Rotten Eye says:

      Name one Democrat or even one Republican that defended the American engineer against the H1B onslaught, and the destruction of American national technological base. What would Hillary have done? Need I ask.

      • RangerOne says:

        Of course you won’t find one because only in the last election cycle did we find a backlash to globalists. Hence having someone like Bernie run as a democrat.

        Regardless of how you feel about them we did have solid candidates on both sides giving a middle finger to globalists policies. And people loved it.

      • kevin says:

        Rotten Eye, again don’t worry about the political wranglings between the Republicans and Democrats. That is just sideshow entertainment for the mass of weed-infested, dumb sheeple majority. It has been a circus and will always be because the vast majority of humans are short-term focused, unthinking beings incapable of much except fighting in queues for the next iPhone gadget, binge watching Netflix or betting on the next Powerball lottery.

        Many folks do not understand the complexity and just trope about the need for transparency and democratic process. Democratic freedoms are only somewhat good for the economy, but is a deadly sin for the long-term survival of a society as a political entity.

        Trump and other potential idiots like him at the helm, is why we cannot trust the people nor their elected representatives, which incidentally cannot be accountable for the long-term goals of Western civilization, nor be entrusted with her deepest secret programs.

        Therefore, I fully support the goals and secrecy of the military-industrial complex that is in tight control of state secrets and her technological base, and rightly so.

        Hence, the short answer to your question is that Hillary (or some other POTUS) would definitely sell out America and american interests to the next highest bidder since she too is short-term focused, with a maximum of only 2 terms to make her mark on history.

        If anything, you really have to be thankful for the military-industrial complex that has the organizational discipline, the tenacity and the long-term vision to safeguard the technological edge of Western civilization (now mostly American but not necessarily always so) against her many (known and unknown) adversaries.

  5. timbers says:

    Will this stop Bayer from buying Monsanto? Or did that already happen?

    • Wolf Richter says:

      That merger has already been approved by the US government but is still waiting for approval in the EU.

      • MCH says:

        This does beg the question that if Bayer is then getting bought out by a Chinese conglomorate, would the US have a say in the matter. The Europeans are concerned about Bayer/Monsanto due to market power. The US is more likely to be concerned from a geopolitical point of view.

      • d says:

        Its also a LEMON with Monsanto go its GLYSOPHATE ISSUES.

    • Wolf Richter says:


      Update: I was wrong about the Monsanto buyout having received approval from US regulators. What did happen was that Bayer said it EXPECTS to receive approval from US regulators, and this stuck in my memory as actual approval. But US regulators had not actually rendered their opinion yet.

      Now it turns out that US regulators might not go along with it.

      Bloomberg reports that “two people familiar with the matter” said that the Justice Department’s antitrust division doesn’t think Bayer’s proposal to sell businesses goes far enough. So this deal might yet fail.

  6. Kaz Augustin says:

    This is an interesting development. If I were a USian, I’d think this was a good deal, except for the erosion happening in related fields, such as education and infrastructure, not to mention bankrupt and failing state and local authorities. It’s all very well to have US firms stay US but the country itself (excluding Old Billionaire Dudes) isn’t that rich. And it’s no longer that well educated. With Trump also putting a stop to those pesky H1-B visas (about time too, I’d think if I were USian), tariff wars looming (first shot across the bow aimed at China), I wonder if Trump is doing the White Guy equivalent of South Africa’s president, Cyril Ramaphosa and his mandatory confiscation of white lands. “Everybody not **us** is against us” essentially.

    South Africa will definitely hid the skids quicker, but I imagine a slo-mo train wreck is on the cards for the USA if this continues. They wanted the world interconnected so they could send their “advisors” out to screw/buy up everything, the worms have started turning, and now they want to retreat. Into what? An economic post-apocalyptic wasteland propped up only by fake news, govt funds, cheap credit and buyback schemes?

    This is a good topic to mull over for the next couple of years while we see how things play out and I thank Donald for this opportunity. Better than sudoku! ;)

    PS I sit outside the USA so I’m sure there’s lots I’m missing from the “coal face” as it were. But I’d be very interested in the rest of your comments.

    • Lenz says:

      Tariffs aimed at China only in rhetoric.
      if US excludes Aus/Can/Mex from “global” tariffs, doesn’t that only hurt EU?

      • Kaz Augustin says:

        Is the EU even relevant anymore? (she asks, from Asia)

        • p coyle says:

          you should direct that question to ms. nuland.

        • Nick Kelly says:

          Ask Apple. They aren’t fans after the EU caught on to their Ireland gig where they were paying about one percent income tax on ALL EU sales.

          The head gal in charge of this for the EU is a tough cookie. On her desk she has a plaster hand with a digit extended up.
          She told Apple to pay Ireland 14 billion.

          EU popular with Apple? No.
          Relevant to Apple? Yes.

      • Ed says:

        If very many countries are excluded the tariff won’t hurt anyone. The steel and aluminum will be trans-shipped through non-tariff countries or else “finished” in a non-tariff country. That finishing can be minimal.

        If you don’t make a tariff fairly complete, it does not work at all.

        Here, I am ignoring whether the question of whether a steel and aluminum tariff is wise in the aggregate, since it harms companies that use steel in the U.S., which are far bigger than the steel industry. I am just commenting on whether it will work as advertised.

        • CrazyCooter says:

          I have been chewing on this a while – and I think the distinguishing factor is the size of the trade deficit. It can’t be assumed that all things are equal plus a tarrif thus a negative outcome. It is vastly more complicated than that. Just consider how many countries subsidize production for political or other reasons.

          I don’t really know for sure – just my two cents – but I think this is really a shot across the bow to other trading partners that they should come to the table and proactively work to “thin” that trade deficit or the monkey hammer is coming out.

          And if we are already 700B in the hole every year, it will hurt us much LESS than those that are on the other side of that and are +100’s of B’s to the positive – they have much more to lose and thus less leverage.



  7. mean chicken says:

    Yes, upwards of 3 decades of subsidized offshoring, by my account. It’s quite simple really, just stop subsidizing offshoring.

  8. Jim Smith says:

    I returned from a business trip to China this weekend and I can assure you that the Chinese cultural norms do not include honoring international law, specifically legal contracts, unless it benefits them, or have any intention of collaboration in a manner which would be considered fair or polite.

    I am a software vendor-they aggressively violated or tried to renegotiate every single covenant in our signed and agreed upon contract, and demanded source code for “the purpose of teaching our partners” (i.e. steal it)

    Tariffs are only tariffs if there is free trade to start with, and to quote the president of Philadelphia longshoremen union, “there is no such thing as free trade”.

    • 2GeekRnot2Geek says:

      Jim Smith nailed it!

      Just go back in time to the late 1990’s (97-98 I think,) when Oracle wrote off their debt in Asia due to non-payment. They signed the contracts, got the software and never paid for it. Oracle’s policy after that was payment upfront or no software. In more recent times remember the wanna cry virus that affected a crap ton of pirated Windows installs in China?

      In the never ending quest for the highest profit margins and lowest cost labor, US Intellectual Property has been in the wind for years, for both hardware and software. Manufacturing and assembly in Asia leads to reverse engineering of hardware, and offshore/Onshore (H1B) “sharing” of software. Yes the share. They want to help each other/get promoted and see nothing wrong with it. It’s why you can no longer download anything on company hardware without special permission in any company in the US.

      I agree with this policy, but IMHO this is shutting the barn door after the horses are gone.

      • Quenton says:

        I was at Nortel Networks and the R&D division I was in was flooded with Chinese, many Ph.D.’s earned here in the West.

        It was a complete looting operation. Same at another company I worked at.

        I have Googled names I remember and surprise surprise, they’re now at Huawei Canada.

        I left the field in disgust.

    • Paul says:

      Jim, when I was younger I traveled throughout Asia. Every piece of software used there was stolen unless it was used by a subsidiary of a US company.
      In fact, every brand of everything was stolen. Perfume, watches, clothes, car parts, music, books, drugs,… you name it.

    • JD says:

      That anyone believed there is such a thing as “Free Trade” as a balanced and sane policy Is a mystery to me … it is as if common sense and integrity disappeared from the US political landscape for over 30 years

    • Ed says:

      I have engineer friends who have met S. Korean and Chinese engineers who recognize their name. The Korean or Chinese engineer (this has happened a few time, only, but I suppose it’s the tip of the iceberg) then says, “Nice to meet you! I’ve read all your patents!”

      In the U.S. you cannot go reading patents. It’s strictly verboten because it pollutes your thinking and you’re liable to lose the patent case if you tell the truth about what you’ve done.

      (Over and out. I am aware of the posting limits!!)

      • kevin says:

        Guys, now you know why there is a need for the military-industrial complex that is running the deep state? lol.

        Forget about patents. That whole patenting industry is a farce that is only meant for narrow commercial interests and to fool naive inventors and innovators into disclosing their creations. Patents does not protect you at all unless you have lots of money to hire lawyers to fight any infringements. If you have so much money to start with, then you would not need to bother with patents in the first place.

        Coca Cola’s secret recipe has no need for patents and she is still making good money for decades since her founding. She would have MORE, not less, competition than just Pepsi, had she patented her secret recipe. lol.

        Publishing your know-how via patents only enables the Chinese or South Koreans or Russians or Indians to easily download and feed off your efforts. Again, it makes for good publicity for the individual inventor given his short lifespan; but is a deadly sin for long-term national or even civilizational competitive advantage. I think you guys already know that legal enforcement of patent rights is just impossible in a clash of civilizations scenario.

        Free trade is a misnomer because nothing is truly “free” in the economic exchange. You selling technologies, (or products with technologies embedded that the Chinese can reverse engineer), to your trade partner today for a quick buck, only means it will enable them to possibly use them against you sometime down the road.

        The real “off-world” and “off-this-world” technologies are not and should never be patented nor published. Keeping it above top secret means the technological advantage is kept with you for as long as you want. The best “protection” of your know-how is simply to keep a tight lid on it and not to share them at all; or to severely limit the knowledge to a select group.

        Most of humankind are base and dangerous to themselves and others, and it will not change anytime soon. If only the military-industrial complex had the foresight to move Nuclear technology into black programs and kept it totally secret (even to POTUS then), I’d think the world will be a much safer place without any rogue states such as North Korea obtaining such weapons of mass destruction today.

        Once again, I’d like to think the current military-industrial complex really meant well and is there for a “good” cause, even though most folks attribute nefarious intentions to them most of the time.

        I think we have to first ask ourselves if the current consciousness of the majority of humankind is mature or sensible enough to handle the whole truth.
        If not, just keep the sheeple entertained and busy with inconsequentials.

        • mr.zelenka says:

          So you are saying a select group of people (monarchy, oligarchy, billionaires, military industrial complex) are better than the rest of us, so they have the right to rule over us? What makes them so special? Who decides which individuals go into that group? If that way of governing was superior, why were there revolutions all over the world just to topple them and implement a version of republic/democracy in the last couple of centuries? Stalin, Mussollini, Saddam, Qaddafi and Asad represented the military induatrial complex of their respective countries. Would you care to ask those people what they think about military industrial complex?

        • ZeroBrain says:

          Mr Zelenka – Please don’t feed the troll. I don’t think anyone takes his “you should be kept in the dark for your own good and the MIC make the important decisions” view seriously.

          Or the bit about “off-world technologies”. I for one would like to see the posting guideline on conspiracy theories / secret “off-world tech” be enforced here. Rubbish.

        • kevin says:

          Well, mr. zelenke, hasn’t it always been like that? Your ancient Kings and Queens were a select group claimed to be “better than the rest” and still exist in this modern era with Royal families persisting even in advanced countries such as the UK, Japan, Sweden, etc.

          Vast sheeple herds still wants to revere them and pay taxes to feed them (in the UK, many young girls hopes to marry into the Royal family too ;) Is that not acknowledgement, if not acceptance, that some are “special”?

          Democracies are similar in function which is to have a “select” group rule over and make decisions on behalf of the rest. The difference is one in which you SEEM to have “selected” your representatives every few years or so, versus one which was already “selected” for you over your earthly duration here.

          Giving you a choice make democracies more psychologically palatable and hence less prone to revolutions since you have the privilege to blame yourself, but did you really think your 1 vote matters in the greater scheme of things? or that your Prime Minister/resident will consider the weight of your tiny vote when he makes decisions impacting your lives?

          Logically and structurally, democratic choice is just a psychological salve. Individually, you are better off not wasting time and energy going to the voting rallies but using that time and energy to improve your own lot.

          Consider the case with America – the epitome of modern Western democracies; don’t you think it odd that a vast country of such size and diversity can have only two major parties presented as a simplified choice for so many decades?
          How can only A or B genuinely represent all the diversity of interest, values and perspectives in our complex societies, except only as a very gross and useless approximation?
          Would you like plain Vanilla or Chocolate, Sir? Have a nice day!

          The dog and pony show will go on, partly because there is no easier alternative but mostly because we have so many among the masses who are born into paradigms and are prisoners of their limited perspectives… much like ZeroBrain (with apt names too ;)

    • ru28 says:

      good points….we have been in a trade war but did not even know it. LOL

  9. lenert says:

    Does the president own shares in either company?

  10. Sinbad says:

    Whilst I am in favour of a nation protecting its industry, people should understand that if American companies can only be bought by American companies, then the value of those companies would be less than if traded on an open market.
    Here in Australia back in the 1950’s and 60’s we had one of the most protected markets on earth, a low GDP, and the highest living standard on earth. Today Australia is a very open market, most large companies are now owned by foreign companies, GDP is good, but the standard of living is much lower.

    • John says:

      Yes, lower standards of living, but more billionaires than ever. Same as here in the US and most other places.

    • Mvrk says:

      “…but the standard of living is much lower.”

      When a country that’s been isolated gets homogenized in with the rest of the world, the rest of the world changes the country…not the other way around.

    • alex in san jose AKA digital Detroit says:

      Sinbad – if the “value on the open market” means “the value on the American market” then so what? That makes Americans more willing not less, to buy (or buy stock in) American companies.

      Australia in the 50s and 60s must have been wonderful. What was that saying they had … “a fair go”? The idea was that everyone got “a fair go” or a fair chance.

    • Brendon O'Connell says:

      Stop making common sense comments.

      Now, I have some fantastic mortgage bonds to trade. Guaranteed long term. 2+2=3.99999999 just ask Israel Intel :-D

    • BoyfromTottenham says:

      Spot on, Sinbad! In the late 60’s Australia had companies producing all kinds of electronic components, and radios, TVs, telecoms equipment, even aviation navigation aids. Then Whitlam slashed tariffs without warning and these companies folded. Poof, gone.

    • Cameron S says:

      So what. What Trump has done is step in the right direction or he could just sit back and let the country be sold off to the highest bidder – that’s the Australian model.

      Australia is a joke and for years has been selling off hard , valuable assets to foreigners to pay for imports. The Foreign Investment Review Board rarely knocks anything back nor does the Government normally step in to block a proposed acquisition.

      The steel industry, like most manufacturing, is now almost non existent.

      The country relies very heavily on imported refined fuel with foreign owned refiners having shut down most of their plants. Now the country has only 4 running refineries , not one in Sydney – their largest city – and if there is a disruption to shipping for fuel imports to the country for any reason there will only be enough supply for less than a month. There are no strategic crude reserves and no fuel supply security policy in place.

      Foreign companies are steadily buying up and taking over mining companies, natural resources and the best agricultural land, including the Chinese which are doing the same wherever on the globe they can.

      Manufacturing has all but disappeared with the once vibrant car industry now a living memory. The country is almost totally reliant on foreign manufactured goods, many of them high cost products with manufacturing being less than 9 percent of GDP and declining when it was once 25%.

      The stupid energy policies pursued by ideological state and national governments divorced from reality have created some of the highest and still rising energy prices in the Western World thus deterring any new manufacturing start ups and forcing others to look at closing plants and moving to a more favourable environment or just closing. Everyone running any kind of business from agricultural to what is left of manufacturing has to increasingly pay more for energy pushing up their production costs.

      Australia is virtually floating on a sea of natural gas but a few months back in 2017 domestic supply ran low and the Government had to step in to force suppliers to divert product to the local market. What a national joke.

      Australia has massive coal resources and could thus produce among the cheapest electricity in the western world. Whilst it exports its coal to foreign countries to run their coal powered power plants which are being built in ever larger numbers, Australia has been progressively shutting down its coal powered plants (most of which are now owned by foreign companies) so as to run on solar panels and wind mills normally built and owned by foreign companies.

      Australians are also selling their domestic residential real estate to pay for their inflated and phony import reliant standard of living such that for the past 10 years foreigner buyers have been able to buy 100% of new residential apartment blocks. In the meantime residential RE prices have gone through the roof because of a shortage of supply and yet they continue to import 230,000 people into the country every year nearly all of whom try to jam into the 3 largest cities. That’s on a total population of just over 24 million.

      Their trade policies, and their negotiators are a joke since they pretty much unilaterally deregulated trade years ago such that they have virtually no negotiating power in most international trade negotiations.

      The country should be virtually self sufficient in food products and once was but it now imports many 100s of millions of food products annually.

      As in the United States, government debt is out of control and growing due, in Australia’s case, primarily to insane and unrealistic welfare policies that now eat up approximately 50% of the national budget. In effect, Australia is borrowing money to pay welfare benefits that cannot be afforded. In a population of just 24 million Australia has over 800,000 working age people ( and rising) claiming they are unable to work and are sitting on what are called “disability” payments . (They even dish out these payments to alcoholics and drug addicts. ) To put that into perspective, if the ratio was the same in the USA with its 324 million people, that would be 10.8 million working age people on such benefits claiming an inability to work. On top of that you have the armies of unemployed sitting on their unemployment benefits, many of them deserving but many of them working the system long term to avoid having to work. Australia takes in tens of thousands of refugees annually and provides them with generous welfare benefits including housing but in every survey ever undertaken on these people less than 20% are employed 5 -10 years after arrival.

      But all that is just the tip of the iceberg.

      So please don’t lecture about what a great example Australia is. Was it not for China, Korea, Japan and others importing vast quantities of raw materials which are then turned into valuable manufactured finished products (that are then in part sold back to Aust consumers) the country would be an economic basket case by now. Just how many exported tonnes of coal, how many tonnes of iron ore or how many lettuce leafs or lbs of meat does it take to pay for just one Honda or one Lexus and the new vehicle market exceeds 1 million units annually – all imported.

  11. eastwind says:

    IANALB I don’t see “substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited” as prohibiting to the takeover of any other large tech company, only Qualcom.

    I haven’t read the EO, just the quotes in this article. But I didn’t see anything in the article that justified the headline, sorry.

  12. Paul says:

    This is another example of the mindless belief in free trade. It would be obvious to a plastic pink lawn pelican that when you run $600 billion trade deficits for a decade, foreigners are going to be holders of shit ;loads of your currency that they have to do something with.

    Get ready for inflation. Once people start to realize there is nothing else to buy with their river of dollars, the shit will really hit the fan.

    In the mean time we get to listen to an army of butt-smooching “economists” telling us how great trade is.

    • Jim Mitchell says:

      You may be thinking of the pink plastic flamingoes that graced the occasional lawn. When I was young, I sold burial life insurance door to door and whenever I saw a house with a plastic pink flamingo in front, I was consumed with joy. They are the perfect indicator of a qualified prospect, in that anyone that bought a pink plastic flamingo would buy anything and had obvious discretionary income. Also, your three generous references to the gastrointestinal tract really got me excited. I have sold my gold position and I’m now all in coprolite. Thank you.

    • mean chicken says:

      “Get ready for inflation. Once people start to realize there is nothing else to buy with their river of dollars, the shit will really hit the fan. ”

      Inflation happens when “all that currency” (Presumably in this context, $US) is washes up on shore.

      For example, real estate inflation due to dollars come flooding back and finding their way into real estate. The US has rule of law that’s supposed to protect these assets from being confiscated (as in stolen), can’t say that’s the case for Chinese real estate?

  13. Scott says:

    I’m curious as to how this will play amount in the tech industry. Most the articles thus far seem to focus largely on the actual story without much opinion. The industry, especially its executives, are not big fans of Trump, but will they support this action, which defends one of the industry leaders?

    This is also the second time in month that the president has used national security to drive economic matters. Will this receive the same savage beatdown that his tariff decisions made?

    Some of the stories suggest concerns about seeding leadership in a new industry (5G) to China (not just the national security angle) and decreased investment in R&D in the U.S. Are these actual signs of an industrial policy from the White House? Probably not.

    • alex in san jose AKA digital Detroit says:

      The techbros are mainly disappointed with Trump on two fronts: First, he’s overweight and graceless. Secondly, and the real kicker for them, is he’s not nearly ruthless and libertarian enough for their tastes.

  14. forumi says:

    Thanks for another great analysis, Wolf. You always offer a valuable perspective and explain the facts supporting it plainly – much appreciated!

  15. Jeremy says:

    Intel must be celebrating today. They were in a panic over that deal.

  16. rex says:

    While I’ve never been a Trump fan, in this case I can’t help but be impressed with his executive order prohibiting this merger.
    Now then, if he could ever get up the bal-er, courage to take the military-security complex in hand… oh wait- he’s probably been shown those ol’ Kennedy movies.

  17. Dan Romig says:

    This is anti-thetical to freedom for US companies and entrepreneurs. If I have a company that produces products, services or technologies, Romig Machine Inc., and somebody wants to buy my company, Uncle Sam has no business interfering.

    There is a national security issue if Romig Machine has a contract to produce parts or software that’s used for advanced military applications such as fighter jets or submarines, and those should have explicit contracts covering them, but Qualcomm Inc. is in the semiconductor and telecommunications equipment business. President Trump’s Executive Order states, ” … a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States.”

    Putting aside the potential health risks of 600 MHz to 6 GHz electronic wave bands being radiated in our environment, 5G technology is in the public domain! NASA and Geoff Brown of M2Mi developed this technology ten years ago. Currently, Samsung, Intel, Nokia, Huawei, Ericsson, and ZTE are also working on 5G applications. South Korea demonstrated 5G technology last month at the Olympics, but perhaps President Trumps is unaware of these trivial details???

    If our leader want to “Make America Great Again,” he should get out of the way and not interfere with this business transaction. Otherwise, he needs to ban the above mentioned companies working on 5G from conducting US trade.

    P.S. As readers may know, my family sold our wheat seed genetics/breeding company eight years ago to another company headquartered in France. Thankfully, the President at that time did not intervene to block the transaction based on National Security concerns. It did take an extra day for the funds to be transferred across the Atlantic though as the State Department used provisions in ‘The Patriot Act’ to monitor and delay our private deal.

    • IdahoPotato says:


      Free trade matters only until it doesn’t. What a joke.

      “We are being bullied” cries the big bully nation with nukes that believes in “pre-emptive strikes”.

      • harvey says:

        Or cries the party that is supposed to support “free market”, how ironic, I guess it is free market only when it benefits them.

    • ru28 says:

      Well….I see your point but it does not work both ways as if you lived in China and sought to sell your company to someone inf France it would not be allowed. In China a foreign company cannot own more than 49%.

    • ru82 says:

      Also….if you want to sort of know the downfall of Nortel, Lucent, and Nokia. Look no further than Asia.

      When S. Korea implement 3G technology they did not allow outside vendors. This gave Samsung, which was a nobody, a leg up in this space.

      Hmmm…..but we allow Samsung cellular to sell equipment to AT&T, Verizon, Sprint.

      The U.S. has been in a trade war for years but did not know it.

  18. RD Blakeslee says:

    For all the thrashing around, pain, anguish etc. coming from established interests everywhere, it may be that “populism” will find some actual emergence and the working stiff losing ever faster in the wealth disparity debacle will finally get some little relief. If so, let’s hope it grows.

  19. Bob Morris says:

    As a FYI: The Lucky Dragon casino just off-strip in Vegas, financed mostly by EB-5 visas, recently went bankrupt after less than a year. Which means those who invested in it can’t stay in US any longer.

    It was a tiny casino, no slots, aimed solely at Asian gamblers.

  20. RangerOne says:

    Now I see some people’s potential dilemma on Trump. I don’t like him, but it’s harder to care when his administration makes a move I agree with… *slow clap*

  21. Bobber says:

    I applaud this move of Trump. As companies get bigger, they take on more leverage and reduce employee count to create synergies. It’s the lazy way to make profits.

    At a time when good drops are getting harder to find and middle class is getting wiped out, we don’t need more consolidation.

    Also, it’s funny that Broadcom thought they could relinquish their U.S. tax citizenship and suffer no ramifications. This is what happens when you don’t view your tax paying to the United States as a privilege.

    Let this be a message to other companies that say they will move if their taxes aren’t reduced to nothing.

  22. Cal says:

    How about this executive order?

    “U.S. Government Tax dollars may only be spent on products manufactured in the United States”?

    Mr. Richter, this site is a great educational resource.

  23. Who signed them up for WTO anyway?

    • Viking says:

      The real question is: who didn’t kick them out after they proved they would keep violating most WTO rules?

  24. Old Codger says:

    China and Russia have a BIG box full of USBs holding all the R & D Boeing etc have ever done, all provided by recently naturalised “Loyal Americans” working in their labs.

    Then we have a bunch of Prime Ministers and Presidents that provide the latest tech for that age, so that MiGs with British engines can shoot down F-86s and now planes and missiles can be copied almost overnight. The last original thought from China was the WHEEL!

    Nearly forgot the Tu-4 ‘BULL’


    • Michael K. says:

      Well….as the proverb goes: “imitation is the sincerest form of flattery”. Why just look at the new Chinese J-20 (a supersized F-22 raptor) and the new Russian PAK-FA (another F-22 clone to some extent). Meanwhile the US Military has cancelled the F-22, destroyed the tooling used to make the aircraft, all to ensure lots of sales for the totally inadequate F-35 which unfortunately is little more than a short range ground attack aircraft, yet advertised to the world as an advanced air superiority fighter. The day one of these F-35’s goes up against either of the F-22 clones will clear that misconception right up for everyone.

  25. Steve clayton says:

    As a guy from the UK I completely applaud Mr trump stopping this company being sold to a foreign company.

  26. Jon Cloke says:

    Just goes to show – imagine what Obama could have achieved if he’d has any balls and hadn’t sold his soul to the Dem’s Wall Street backers..

  27. ML says:

    Ironic that US is proud of the “American Dream” yet now seeks to deny China its dream.

    If China has to resort to stealing so that it can copy USA ideas with a view to producing and selling cheaper and accumulating heaps of cash, how come US didn’t reakise that it too could make heaps of cash simply by reducing prices? Seems to me that the underlying reason that USA is in financial straits is because of greediness.

    Good luck with the tariffs. We shall trade elsewhere.

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