Various countries such as China have been poised to make a big investment in the United States in recent times. However, the American government has taken caution to these moves with an aim of safeguarding its national security. Such a move has been made after a consideration especially that which would have a long-term effect. Consequently, many critiques have argued that allowing acquisition of American companies by foreigners is like selling off the country’s ability to produce wealth by itself. This paper proposes to discuss the benefits that the US government will gain by preventing the acquisition of US companies by foreign companies.
Primarily, preventing acquisition or rather takeovers of local companies by foreign companies will allow the US government to have full control of the supply of goods and services that are crucial to the functioning of the American economy (Moran, 2013). It is evident that when foreign companies have full control of the supply of essential goods and services of a country then, they can delay, deny or even set conditions upon provision of those goods and services. Some of those goods might be including, but not exclusively the way a country functions in regards to defense industrial base.
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Furthermore, by preventing an acquisition of companies, the US government can have the overall control of technology or expertise that would otherwise be shifted to foreign countries, therefore, jeopardizing the USA national interest (Moran, 2013). The worry on whether foreign companies would allow the United States to transfer some capabilities to a thirds party is one of the main reasons why the American government decided to sanction such takeovers (Ang, Jiang, & Wu, 2016). In this light, the American government can have control on major capabilities of its workforce through prevention of acquisition of local companies by foreign organizations.
In conclusion, it is evident that through prevention of acquisition of local companies by the foreign firms, the USA government would have full control of the production of basic goods and services as well as its technology and expertise.
References
Ang, J. S., Jiang, Z., & Wu, C. (2016). Good apples, bad apples: Sorting among Chinese companies traded in the US. Journal of Business Ethics , 134 (4), 611-629.
Moran, T. H. (2013). Foreign acquisitions and national security: What are genuine threats? What are Implausible Worries? In Regulation of foreign investment: Challenges to international harmonization (pp. 371-393).
