President Donald Trump’s rejection last week of a Beijing-backed fund’s attempt to acquire a US semiconductor company was for many in Washington an easy call because it involved a sensitive sector and funding from the Chinese government. The decision did little, however, to settle a debate on Capitol Hill over how the US should approach foreign acquisitions that the government perceives to be less clear-cut. At issue is how to balance the need to protect national security with the desire to stay open to foreign investment, especially when the money is coming from China, a military and economic rival. In rejecting Canyon Bridge Capital Partners’ attempt to buy Lattice Semiconductor, which is based in Portland, Oregon, Trump declined to overrule a recommendation by the Committee on Foreign Investment in the US to block the transaction. CFIUS is a multiagency panel that reviews deals for national-security concerns. For US policy makers, the reasons were straightforward: The sale could ...

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