Donald Trump Says Intel CEO Should Resign over China Ties
Intel tock is suffering after President Trump called for the resignation of the company's CEO over his relationship with China.
Quick overview
- President Trump has called for Intel CEO Lip-Bu Tan to resign due to his past investments in the Chinese military.
- This unusual demand follows a Department of Justice ruling against Cadence Design Systems, where Tan was previously CEO, for violating U.S. export controls.
- Concerns have been raised about Intel's ties to China, especially given the company's role in U.S. semiconductor manufacturing and national security.
- Following Trump's comments, Intel's stock experienced a 3% drop but showed signs of recovery in early trading.
President Donald Trump is calling for the CEO of Intel Corp., Lip-Bu Tan, to hand in his resignation after investments in the Chinese military come to light.
Will Intel’s CEO step down as a result of Trump’s demand for his resignation? It is highly unusual for a sitting President to attempt to interfere in a private company’s management decisions, but that is exactly what Trump did when he posted on social media Thursday that Lip-Bu Tan should resign right away.
This comes after a decision from the U.S. Department of Justice in July that Cadence Design Systems pay $140 million for violations of the United States’ export controls by doing business with China. Tan was the chief executive of Cadence and is currently the CEO of Intel, and Trump has called the man deeply conflicted.
Tan served as chief executive for Cadence from 2009 until 2021. He was not charged in the Department of Justice’s decision, but his ties to China have been called out by both Trump and Republican Tom Cotton recently.
Why Tan’s Connection to China Matters
The reason that Trump is dragging Tan and Intel over a possible relationship with China and its military is because Intel has made an agreement with the United States government to improve the semiconductor manufacturing industry within the U.S. The company has received billions in funding from the government to make this happen.
The concern that Trump and his administration has, then, is that a company with a possible connection to the Chinese military is placed in a key position of power within the United States’ digital infrastructure. There are concerns that the company would be able to accommodate the Chinese government spying on sensitive U.S. data, among other concerns.
While it is not illegal for private companies within the United States to invest in Chinese firms, with Intel’s unique position, the connection could mean trouble for both the U.S. government and Intel. Since Trump blasted Intel’s CEO, the company’s stock dropped 3%. It partially recovered in early morning trading on Friday with an increase of 0.91%.
On Thursday, Intel released a statement saying that the company and its management are committed deeply to the interests of the United States’ economy and national security.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save