(Bloomberg) -- The proposed takeover of U.K. chip designer ARM Ltd by the U.S. company Nvidia Corp could weaken its access to foreign markets if it gets dragged into the trade war between the U.S. and China, lawmakers have warned.

Talks between Nvidia and the U.K. government are at an early stage, according to a person familiar with the discussions, as Culture Secretary Oliver Dowden considers whether to refer the deal to the Competition and Markets Authority (CMA).

Members of Parliament, who have already expressed concerns about jobs at ARM’s Cambridge headquarters, want ministers to examine the risk of the company being drawn into Washington’s conflict with Beijing after President Donald Trump imposed restrictions on the trade in technology between the two countries.

“We need to understand the implications on British business and jobs if ARM is owned by an American company which is subject to the decisions of President Trump,” Labour MP Darren Jones, a specialist in technology law, said in an interview. “I hope a review of that will be included as part of the government’s assessment of whether the takeover bid needs to be called in.”

The U.S.-China tech battle has already affected British policy making. Prime Minister Boris Johnson was forced into a u-turn earlier this year over the involvement of Chinese telecom company Huawei Technologies Co Ltd in fifth-generation networks after the U.S. imposed export controls on components. The issue is complicated for the U.K. because it is seeking a trade deal with the U.S. as it breaks with the European Union, its biggest trading partner.

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According to analysis published by lawyers Akin Gump Strauss Hauer and Feld LLP, ARM is already subject to applicable U.S. export controls -- which the company says it complies with -- and nothing is altered by the takeover. They argue the nature of the product is the key issue, not its owner.

That view is contested by Daniel Zeichner, the member of Parliament representing Cambridge, where the company is based. He said he has seen several different legal interpretations of what a U.S. corporate takeover could mean. He’s also concerned the deal could give the U.S. an upper hand when it comes to trade negotiations.

“It does seem as if it could hand power to the American authorities,” Zeichner said in an interview. “It’ll be ‘America First’ whether Trump or Biden win and we should have no illusions about handing over one of our biggest bargaining chips without making sure it’s watertight that the company stays in the U.K. without outside control.”

While officials are unlikely to block the $40 billion takeover, according to a person familiar with the government’s approach, officials are considering attaching conditions on the number of jobs Nvidia will keep in the U.K. as part of the proposed $40 billion deal. They could also instruct Nvidia to keep its headquarters in the U.K. and register its intellectual property in the country, though no decisions have yet been taken.

The U.K. is just one of several jurisdictions, including China, where the regulatory scrutiny of the deal will be intense.

A spokesperson for Nvidia said it will keep ARM’s headquarters in Cambridge and ARM’s IP registered in the U.K. while investing in a new world-leading AI research center and training the next generation of computer scientists. The spokesperson said the company is happy to put its plans into a legally binding agreement if required.

“ARM is an important part of the U.K.’s tech sector and makes a significant contribution to the U.K. economy,” the U.K. government said in a statement. “While acquisitions are primarily a commercial matter for the parties concerned, the government monitors these closely and when a takeover may have a significant impact on the U.K. we will not hesitate to investigate further and take appropriate action.”

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