Hostile regulations introduced under the Biden administration are helping Beijing beat America, experts say
As experts warn that the United States is at risk of losing a technological arms race to China, others say axing Biden-era restrictions on corporate mergers and acquisitions will help the country remain competitive.
Those restrictions helped the Biden administration stymie corporate mergers in court, pushing companies in critical sectors like defense and technology to drop multibillion-dollar ventures. Biden’s Federal Trade Commission, for example, sued Lockheed Martin, challenging its acquisition of rocket motor producer Aerojet Rocketdyne. The move forced the defense giant to abandon the acquisition. Similarly, Nvidia had plans to acquire the British AI company Arm Holdings in 2022 but ditched those plans, citing “significant regulatory challenges” from the FTC.
Doing away with onerous restrictions on mergers and acquisitions is crucial to driving innovation, a new report from the policy group American Edge Project found. “Given that China’s aggressive state-backed industrial policy is closing the global innovation gap, our merger policies need to prioritize innovation and national security so that the U.S. can continue to lead the global tech race,” said Asheesh Agarwal, a former assistant director of the FTC’s office of policy planning who advises the project.
The report argues that to best counter Chinese state investment in technology, including AI and microchips, the Trump administration should prioritize innovation when assessing mergers and integrate national security concerns into merger reviews to determine “whether the merger would affect the economy’s capacity to innovate and defend our national security.”
“Mergers and acquisitions strengthen America’s technological edge, particularly in artificial intelligence, biotechnology, and semiconductors, by providing start-ups and small companies with the critical financing and infrastructure to scale their innovative technologies in a competitive market,” Agarwal said.
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