Trump really wants to sabotage China’s plans to become a high-tech power house.
The U.S. Treasury Department will block firms with 25 percent or more Chinese ownership from acquiring U.S. companies with “industrially significant technology,” a government official told Reuters.
The new policy is the U.S.’ latest economic aggression toward China, following military restrictions on contracts with Chinese technology companies. Additionally, President Trump’s tariffs on $34 billion of Chinese goods will go into effect on July 6. The tariffs mostly target technology and manufacturing products.
China is intent on transitioning from a country where high tech products are assembled, to one that manufactures the products. That requires owning significantly more intellectual property — a goal that China set out in its Made in China 2025 initiative. China is also investing heavily in Artificial Intelligence — which is causing the U.S. military to step up its game in turn.
Trump is specifically attempting to stop China’s Made in China plans, because they compete with his “Made in America” ambitions. By blocking Chinese-affiliated firms from acquiring U.S. tech companies, China would be unable to advance its manufacturing aims through the acquisition of U.S. tech and intellectual property.
In response, the Chinese government has reportedly begun downplaying Made in China 2025 messaging. But don’t expect the country’s tech ambitions to disappear. It is reportedly working hard to attract top tech talent, and bring Chinese technology expatriates back home.