"Business Iron Curtain": What Trump's War on Intel Signals
The dangerous precedent of targeting executives for geopolitical gain
At the end of last month, Intel made a shocking announcement: it was cancelling its chip projects in Europe, specifically Germany and Poland. Announced in 2022, these factories, valued at €80 billion and supported through government subsidies, were at the center of Europe’s drive to establish “tech sovereignty” and increase its share of advanced global chipmaking to 20% by 2030 (up from 10%). They were also a new expansion of America’s technology footprint in the West, at a moment when China was making significant inroads, such as by localizing EV production in markets like Hungary.
The factory cancellations were announced in a letter penned by Intel’s new CEO Lip-Bu Tan. At the time, they caused little uproar—in part because the German plant had been frozen last September, around the same time that rumors emerged of a possible Qualcomm acquisition of Intel, and a few months after Intel paused a separate project in Israel.
(“Business Iron Curtain” is a concept/expression of The Geopolitical Business, Inc)
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But now, at the start of August, geopolitics and business have intersected in a new, unexpected way, as US President Donald Trump calls for Tan to resign due to alleged links to the Chinese state.
Underpinning Trump’s criticism is the investment fund that Tan founded in 1987 (Walden International), based in the US, which has made over 100 investments in China over the decades, representing up to $2.25 billion. One of them was a $50 million injection in SMIC, today the largest chip maker in the country, whose strategy is set by the Chinese government, and is at the center of China’s drive to achieve chip self-sufficiency and challenge America for global technology dominance.
Walden is also one of a handful of US venture capital firms called out in a bipartisan report by the US Congress, released last March, for continuing to invest in Chinese AI and chip sectors in ways that “contributed” to the People’s Liberation Army (PLA) and the persecution of the Uyghurs. Without saying it explicitly, the accusation is that Tan has supported and accelerated China’s tech development, making him supportive of China, not the US.
NEW BUSINESS REALITY
Tan has responded, calling Trump’s claims “misinformation.” Beyond a public feud between the President of the United States and one of America’s most powerful CEOs, a new reality is forming for global executives, underpinned by geopolitical concerns and competition. Trump’s collision with Tan is not a “one-off” or transient event. A disruptive door has been opened, which forces businesses, particularly in the West, to rethink their “shape” and appearance as the geopolitical climate becomes more volatile.
Globalization is once again colliding with global affairs.
There are several dimensions to what is occurring.
First, businesses are being forced to act in the interest of the nation (national interest). As rivalries escalate and the stakes rise, governments want their firms to put politics ahead of profits. The global supply chain redesign, especially strategies like reshoring or friendshoring, reflects this desire of countries and the constantly expanding grip of governments over business operations. Now, alongside supply chain changes, businesses are being prodded to appoint people at the highest levels that reflect a specific “national identity,” and through this, at least on paper, appear to have the nation’s best interests at heart. What this identity is, and what exactly these interests are, remains fluid and still to be defined in long-term and substantive ways.
Second, companies are being forced to adapt to the fusion of geopolitics, culture, and localization, which could be termed “geocultural localization.” Many organizations localized their operations as the old era of globalization accelerated, and in the backdrop, a certain level of protectionism rose. But at the center of market localization was proximity to consumers (i.e., Shein, Temu opening up factories in the US) or access to geography-specific benefits (like a cheaper labor pool or faster production). But, out of the door that the Trump-Tan fight has opened, firms have to take into account how geopolitics is redefining the culture of the nation. In the US and Europe, this could mean not hiring people who originate from geographies with which the West is fighting. In parts of the Middle East or Asia, it could be religion that is at the center of geocultural localization. Geopolitics will inject local culture into business operations in new ways, requiring firms to localize in greater and greater degrees or set their red lines.
Third, what begins as going after executives linked to China could snowball into something much bigger. Some of America’s (and the world’s) largest tech firms are run by Indian-origin immigrants, like Alphabet, Microsoft, IBM, and Adobe. As Trump collides with India over Russian energy purchases, raising the tariff to 50%, the next step could be putting the spotlight on Indian immigrants running American businesses, who Trump believes have “conflicted interests.” After China and India, the spotlight could be on Japanese, Korean, or Russian executives. And, from the workforce, other “functions” could be drawn into the discourse, like where businesses have been allocating investments and capital (i.e., emerging markets over America). The US could start criticizing its businesses for behaviors that the government believes are enhancing the competitiveness of other nations. Going after Tan may be the stepping stone to a much larger play.
Fourth, and lastly, nothing is stopping China, India, Europe, and others from “mimicking” America. It has already happened. In 2024, India unveiled new rules requiring Chinese phone makers in the country to appoint Indian nationals in senior roles. And, Indian firms with Chinese nationals as directors are being “flagged” by the National Security Council, which oversees matters of national security for the Indian prime minister. Except now, nations might target American nationals, not just Chinese. The more Trump raises the tariff heat or threatens security changes, some states could mandate that US nationals cannot lead their conglomerates, strategic businesses, or even foreign subsidiaries. This could quickly expand in all directions, putting businesses in the uncomfortable situation of hiring people based explicitly on ethnicity above all else.
PARADOXES & PAUSES
For the West, where the tide of nationalism is rising, and ideas like DEI (Diversity, Equity, and Inclusion) are being pushed aside, what Trump has done runs counter to what conservatives want. Many conservatives want the return of a meritocracy, where somebody’s skills, experience, and overall professional conduct define whether they get a position or not, a shift away from certain hiring practices today, where various groups, like minorities, are given preference in selection simply because of their skin color, sexual orientation, or other factors.
Except, in the case of Intel, Trump is calling for the opposite of meritocracy. He wants Intel’s CEO not to be linked to China at all. In this case, ethnicity overrides meritocracy.
This reflects the emerging limits, imposed by geopolitics, on specific political ideas. Within certain parts of society, the grip of meritocracy could be unbreakable. But, when it comes to geopolitics, it could be ethnicity, religion, and culture that define placement, hiring, and advancement.
In tandem, what is taking place between Trump and Tan will give many Asian business executives pause. Those who have spent time in Asia know that few executives are only linked to a single geography in the region. A Chinese executive could have family in both mainland China and Taiwan. A Japanese executive could have links to Japan, South Korea, and parts of Southeast Asia. What is taking place with Tan will force these executives to begin making a painful personal and professional decision, where they pick “one ethnicity” over another.
Geopolitics could force Asian executives to pick sides ethnically, distancing them from one geopolitical corner and aligning them with another.
This is a reality few executives, in Asia or beyond, have any experience with in modern times.
Conclusion
The era where the more globalized an executive was, the more beneficial they were to the business may be ending. Strangely, the more “black and white” somebody is, the more precise their national origin and identity are, the better understanding they will have of which markets are open for business and which markets are closed, allowing them to progress faster.
Once again, geopolitics is ripping up decades of business understanding and guiding principles.
What takes place next with Intel could be more than significant. If Intel capitulates, and Tan is fired or resigns, Trump could aim at more executives. If Intel fights back, Trump could rethink a repeat. However, regardless of how the situation evolves, every global business should be reading the signals. Because of geopolitics, ethnicity is returning as a central part of business conduct, even if the company is allergic to such ideas.
Executives could be appointed or let go, based on factors entirely out of their control, like where their parents were born or where they were sent for schooling.
In the process, businesses will face a new conundrum, where maintaining a specific culture (i.e., not caring about ethnicity) could jeopardize growth, while heeding what a government wants (i.e., fire somebody because of ethnic links to another nation) permanently changes their perception and reputation in the eyes of the world.
Once again, the future of business is being defined by geopolitics.
-ABISHUR PRAKASH AKA. MR. GEOPOLITICS
Mr. Geopolitics is the property of Abishur Prakash/The Geopolitical Business, Inc., and is protected under Canadian Copyright Law. This includes, but is not limited to: ideas, perspectives, expressions, concepts, etc. Any use of the insights, including sharing or interpretation, partly or wholly, requires explicit written permission.
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