Many have said that if Trump wins the presidency, a new ice age of global trade protectionism may be upon us. Well, some may be taking steps to preempt that and are already launching various protectionist measures in response to rising populist anger.
Just a few months after the US Treasury unveiled new anti-tax inversion rules, which were meant to kill the Pfizer-Allergan deal, but according to many may have launched a new wave of global deal protectionism, overnight Germany appears to have retaliated in kind when according to Welt am Sonntag, Angela Merkel’s government was exploring options to limit any purchase of more than a 25% stake in German companies.
As Reuters adds, the German Economy Ministry wants to protect high tech companies in Germany from unwanted takeovers, especially from state-owned and partly state-owned companies in non-European countries. Welt am Sonntag (WamS) said Deputy Economy Minister Matthias Machnig had in the past week sent to members of the German government a paper containing six key points for reviewing investment at the European Union level. The paper foresees wide-reaching rights for the EU and national governments to prohibit company acquisitions by investors in non-EU countries, the newspaper said.
In other words, global M&A as a means of laundering hot money, either of central banking of Chinese origin, is about to slam shut, leading not to a plunge in global ibanking M&A fees, but also forcing the cash to stay “local” and leading to even greater asset bubbles, especially in China.
The issue of foreign takeovers has come to the fore in Germany with Chinese home appliance maker Midea buying German robot maker Kuka and Chinese chipmaker Sanan Optoelectronics saying on Monday it had been in contact with German lighting group Osram about a potential acquisition or cooperation deal.
Asked about the newspaper report, a spokesman for the Economy Ministry said he would not comment on internal government working papers.
“Minister (Sigmar) Gabriel has, however, repeatedly made clear that he would like to sound out options – also at the European level – to make fair competition possible, especially in international competition with state-subsidized foreign companies, and at the same time to remain open for investment,” the spokesman said.
At this rate Trump won’t even need to win the presidency for the world to undo on its own some 70 years of post World War II “globalization.”