According to Reuters, a spokesman for the US Department of Commerce, Trump is close to releasing a list of 89 Chinese aerospace companies that will no longer be able to access US technology exports. This move would escalate tensions between the two countries as the Biden administration plans to take over. Already the US and China are battling over trade, Taiwan and handling of the coronavirus pandemic. Commercial Aircraft Corp. of China Ltd. and the Aviation Industry Corp. of China Ltd. are among the companies that will be restricted from buying American goods and technology.

On Monday, China’s Foreign Ministry came out opposing the move, saying the US was unfairly condemning China. Zhao Lijian note that the US is exploiting the concept of national security to oppress foreign companies.

Increased Pressure

Trump has been faced with immense pressure from across the world and his citizens to stop frustrating China. Besides, if the US cuts ties with China, it would mean loss of business for the US. With reason, Trump in a tweet in February, Trump noted that he did not wish to make it impossible to trade with China as he wants them to continue purchasing top tier jet engines from his country.

Months later, Trump put AVIC, a state-owned conglomerate with 100-plus subsidiaries on the list of businesses run by the China’s People’s Liberation Army. AVIC also makes airlines and private jets in partnership with American companies. With this release, Comac, where AVIC is also a shareholder, began manufacturing alternatives to Boeing Co. and Airbus SE planes and delivering them to the Chinese carriers. China’s aviation market is predicted to purchase over 8,600 new planes worth $1.4trillion in the next 20 years.

However, with the current tension between the two countries, America is likely to lose on this contract. The biggest loser will be General Electric Co., a supplier to Comac, which is currently testing C919 narrow-body planes. Comac utilizes engines from CFM International, an equally owned venture between General Electric and France’s Safran SA.

Just a month ago, Trump approved an directive to bar American investments in Chinese run companies by the military, as he intensifies his pressure on Beijing. Besides, the US Securities and Exchange Commission is seeking to kick Chinese firms off the US stock exchange by imposing a rule that would delist companies failing to comply with the American auditing rules. Reuters also noted that a senior US military officer had visited Taiwan, further escalating the tension between Washington and Beijing.


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