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Big blow to Chinese plane-makers as Trump bars export of critical jet parts, technology
The US Commerce Department has suspended licenses of US firms that allowed export of critical products and technology to state-owned Commercial Aircraft Corp of China Ltd read more
A Comac C919 flies during an aerial display at the Singapore Airshow at Changi Exhibition Centre, in Singapore, February 20, 2024. Source: Reuters
In a major setback to China's plane-making industry, the Donald Trump administration of the US has blocked the export of critical US jet parts and technology to the communist country. According to a New York Times report, the US Commerce Department has suspended licenses of US firms that allowed export of critical products and technology to state-owned Commercial Aircraft Corp of China Ltd (Comac).
Earlier, the Commerce Department confirmed to Bloomberg that it was reviewing 'exports of strategic significance to China.'
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'In some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending,' the department said in a statement.
Why is the move a setback for China?
The Comac, China's government-backed plane-maker, relies on American-made GE Aerospace engines for manufacturing its C919 planes.
USA's fresh restrictions are not likely to create supply chain issues for Comac immediately as the firm had already stockpiled engines to build dozens of planes this year, reported Bloomberg.
However, the Trump administration's move is poised to hurt the firm's business prospects in long term.
China-US trade war
The latest move by the Commerce Department is a part of an array of challenges that Beijing faces in its trade tensions with the world's largest economy.
China has repeatedly called American sanctions on Chinese goods 'wrongful' and called on Washington to cancel them. On Wednesday, as a US court blocked Trump's sweeping reciprocal tariffs on its trading partners, Beijing responded by saying 'trade wars have no winners'.
Global markets have been in chaos since Trump's tariff announcements, followed by his sudden reversals and pauses as foreign governments scrambled to negotiate.
The turmoil worsened due to a prolonged trade war between the world's two economic giants. They slapped massive tariffs on each other, peaking at a 145 per cent US tax on Chinese imports and a 125 per cent Chinese tax on American goods. The two nations have since called a truce, with US tariffs on China dropping to 30 per cent and Chinese tariffs on some US imports falling to 10 per cent.
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