survey
Firms demand Sh1b from grains agency Next Story
Jaswant Rai edged out of sugar body leadership Previous Story
Today's Paper
You are here  » Home   » Business News

President Trump pushes back on foreign takeover deals

By BBC | Published Tue, August 14th 2018 at 14:19, Updated August 14th 2018 at 14:26 GMT +3
US President Donald Trump

The US has passed a new law that strengthens the government's power to review - and potentially block - business deals involving foreign firms.

US President Donald Trump signed the bill, which is part of a broader military spending measure, on Monday.

ALSO READ: Africa abandoning Internet satellite status

The US worries Chinese firms use investments and acquisitions to gain access to new technology - a concern also behind the US-led trade war.

China was critical of the US defence act.

The law was supported by both Republicans and Democrats in Congress, which approved the measure earlier this year.

It comes as other countries, including the UK, consider ways to toughen their scrutiny of foreign deals with an eye to China.

UK ramps up powers to block foreign takeover deals
Chinese takeover of German firm Leifeld collapses
Details of the bill
The new law expands the type of deals subject to potential review by the Committee on Foreign Investment in the US (CFIUS), which vets foreign investments to see if they pose a risk to national security.

Avoid becoming a victim of Fake News. Subscribe to the Standard Group SMS service by texting 'NEWS' to 22840.

For example, it directs the committee to consider how potential transactions might affect personal data and cyber-security and whether an investment gives foreigners access to "material" non-public information.

It also strengthens export controls, allowing the US to review overseas deals, such as joint ventures.

The new law does not specifically name China.

ALSO READ: FBI agent who criticized Trump in text messages is fired

However, it directs CFIUS officials to consider whether the transaction involves a "country of special concern that has a demonstrated or declared strategic goal of acquiring a type of critical technology or critical infrastructure".

China criticised the measures, saying it would comprehensively assess them.

"The US side should objectively and fairly treat Chinese investors, and avoid CFIUS becoming an obstacle to investment cooperation between Chinese and US firms," China's Commerce Ministry said, according to Reuters.

The legislation also says "long-term strategic competition with China" is a principal priority for the US.

US Treasury Secretary Steven Mnuchin said he welcomed the new law.

RELATED TOPICS:

Would you like to get published on Standard Media websites? You can now email us breaking news, story ideas, human interest articles or interesting videos on: [email protected]

RECOMMENDED