U.S. President Donald Trump has blocked the USD1.3 billion take-over of Lattice Semiconductor Corp, a publicly-traded Oregon company, by Chinese-owned Canyon Bridge Fund on national security concerns. The Committee on Foreign Investments in the United States (CFIUS) and President Trump determined that “the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation,” prohibiting Canyon Bridge, its partner Yitai Capital and Yitai’s parent, the China Venture Capital Fund Corp (CVCF), from purchasing the U.S. firm, due to the importance of the semiconductor supply to the U.S. government, including Lattice’s programmable logic devices.

Other Chinese deals under review include MoneyGram International’s proposed sale to Ant Financial, the financial-services company of the Alibaba Group. The U.S. government is also examining an agreement by Chinese conglomerate HNA Group Co to buy a stake in SkyBridge Capital.

China’s Ministry of Commerce expressed “concern” over the decision. Spokesman Gao Feng said that while each country has a right to probe investments in “sensitive fields”, the power should not be used as “an instrument for implementing protectionism.” China “hopes relevant countries can treat Chinese companies’ overseas acquisitions objectively and impartially, give fair treatment to such normal business practices, and create a reasonable and transparent business environment to avoid impacting investors’ confidence,” he said.

Xinhua News Agency commented that “Chinese investment is not a Trojan horse” and that President Trump’s decision to block the deal was “penny wise and pound foolish”. “It is in the interests of the United States itself to focus on the bigger picture and have a long-term vision, instead of being preoccupied by immediate interests,” it added.

Trump’s predecessor, Barack Obama, had also intervened to prevent a similar deal involving semiconductors on security concerns last year. Chinese government-backed Grand Chip Investment scrapped plans to buy German semiconductor equipment maker Aixtron in December. Still, it is unusual for a U.S. President to block a business deal over national security concerns – Trump’s was just the fourth such order in the past 25 years.

“It is important to note that the U.S. government has been particularly concerned with foreign investment, particularly Chinese investment, into the U.S. semiconductor industry for years,” said Lawrence Ward, Partner at the international law firm Dorsey & Whitney.

In another setback for Chinese investment abroad, a court in the Ukraine has frozen the 41% stake of Beijing Skyrizon Aviation in one of the world’s largest aircraft and helicopter engine manufacturers Motor Sich. The Ukrainian security services allege that the purchase of the company’s stock by groups controlled by Beijing Skyrizon Aviation was an attempt to take its assets out of the country. Motor Sich’s technologies could be valuable to Chinese scientists and engineers working on developing high-powered aircraft engines.