Donald Trump’s decision to block a deal between a China-backed private equity firm and chipmaker Lattice Semiconductor will harm US and global economic growth, according to comments made by Chinese news agency Xinhua.
In an executive order last week, the US president said that both Canyon Bridge Capital Partners and Lattice must take “all necessary steps” to abandon their proposed $1.3 billion deal, struck last year.
Canyon is known to have backing from the Chinese government, and the deal began to face increased US regulatory scrutiny late last year.
Canyon also reportedly has indirect links to China’s space program, adding further pressure.
Canyon is also interested in acquiring UK-based Imagination Technologies, but it is looking to strike a deal that excludes the graphics firm’s US operations, in a bid to avoid similar issues as it has had with Lattice.
Chinese news agency Xinhua, in commentary, has since slammed Trump’s decision. “The move, which is detrimental to both America’s growth and global economic recovery, also runs counter to the mutually beneficial and win-win nature of China, US relations.”
In comments cited by Reuters, the news agency went on to echo China’s commerce ministry spokesman who also hit out at the failure of the deal to go through.
Xinhua stated that security reviews of investments in sensitive sectors “should not be used as a tool to implement protectionism”.
Further comments by analysts called the decision “penny wise and pound foolish”, as well as “short-sighted”.