International

Donald Trump Presidency: Lull In Chinese Deals?

China

The Donald Trump presidency heralds change, and perhaps not of the sort that wheelers and dealers in the corporate world would really like to see.

Bloomberg reported that the frenetic pace of Chinese corporate deal making stretching across borders may experience a bit of a lull.

That’s because, as the newswire reported, bankers and lawyers are “counseling some Chinese clients to hit the pause button” unless and until president-elect Trump offers up more detail on just what he sees for the future of deal making across countries. The focus would be on Chinese firms targeting U.S. acquisitions.

Chinese companies have spent as much as $225 billion on overseas acquisitions so far this year, said Bloomberg, which is a pace three times that seen in the year earlier, with an emphasis on U.S. buyouts.

Trump has spent much time insisting that China has been unfairly advantaged in trade agreements with the U.S. He has also stated that U.S. firms need to stay within U.S. borders and has vowed to cut corporate tax rates in an effort to keep companies domestic. One specific piece of information that could do much to help determine the course of Chinese/U.S. cross-border deals hinges on just who will be named to the role of Treasury Secretary, as that person will also head the Committee on Foreign Investment in the U.S. (CHIUS).

In the recent past, the CHIUS has raised concerns onerous enough to scuttle deals, notably the $3.8 billion proposed price to be tendered by Chinese firm Tsinghua Unisplendour Corporation for 15 percent of Western Digital.

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