President Donald Trump has blocked a Chinese venture capital fund from purchasing a U.S.-based semiconductor company because of national security concerns, the White House announced today.
The president’s order prohibits the acquisition of Lattice Semiconductor Corporation by China Venture Capital Fund Corporation Limited, known as CVCF, which manages industrial investments and venture capital.
The decision to issue the order came in response to a recommendation from the Committee on Foreign Investment in the United States, a Treasury-chaired panel that reviews foreign investment for national security risks.
White House officials said there were concerns about the potential transfer of intellectual property to CVCF, Beijing’s role in supporting the transaction and the importance of the semiconductor supply chain and Lattice products in particular by the U.S. government.
The little-known CFIUS occasionally garners headlines when controversial foreign investments are in the news. The administration has recently been considering making changes to the agency. John Cornyn, the No. 2 Republican in the Senate, is also pushing a bill that would revamp the group and expand its mandate to make it harder to sell companies that have advanced technology to the Chinese.
More recently, Senate Minority Leader Chuck Schumer personally wrote to Trump last month urging him to block China from buying more U.S. companies to increase pressure on Beijing to help rein in North Korea’s nuclear missile program.
The move comes as trade relations between the U.S. and China are becoming increasingly tense. The Trump administration is currently pursuing two investigations regarding whether to limit imports of steel and aluminum for national security reasons — both of which are largely aimed at China — and another examining Beijing’s handling of intellectual property.