The Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, banning them from purchasing a range of American goods and technology, according to a draft copy of the list seen by Reuters.
The list, if published, could further exacerbate trade tensions with Beijing and harm American companies that sell civil aviation parts and components in China, among other industries.
A spokesman for the US Department of Commerce, which produced the list, declined to comment. The Chinese Foreign Ministry did not immediately respond to a request for comment.
The Commercial Aircraft Corp of China Limited (COMAC), which is on the list of Chinese efforts to compete with Boeing and Airbus, ranks the Aviation Industry Corporation of China (AVIC) and 10 of its related entities. The list is included in a draft rule that identifies Chinese and Russian companies that the US considers “military end users”, a designation that means licenses to American suppliers to sell a wide swath of commercially available items Should be taken.
According to the rule, an application for such a license may be denied more than is permitted.
US President Donald Trump has made his move against China in recent months. Ten days ago, he unveiled an executive order prohibiting US investment in Chinese companies that say Washington is owned or controlled by the Chinese military.
The pending list comes after the Commerce Department expanded the definition of “military end-user” in April. The April rule includes not only the Armed Services and the National Police, but also any individual or institution that supports or contributes to the maintenance or production of military goods – even if their occupation is primarily non-military.
The term export restriction applies to disparate items such as computer processing, computer equipment such as digital software, digital oscilloscopes and aircraft parts and components.
In the context of aircraft, items include everything from brackets to engines to flight control boxes.
The list comes as a sensitive time for the US aerospace industry as Boeing sought Chinese approval of its 737 MAX after it was approved by US regulators last week. In March 2019, China was the first nation to land the jet after two fatal accidents and is expected to wait months to lift the ban. A Boeing spokesman declined to comment.
Former Commerce Counsel Kevin Wolf said Commerce shared the draft rule with a technical advisory committee of industry representatives, and should have been kept confidential.
Wolf said the rule and list could still be revised and the clock is running to implement it under the Trump administration because it would have to send the rules from the middle to the Federal Register, the official federal publication. -December.
In the draft rule observed by Reuters, the Commerce Department said that being able to control the flow of American technology to listed companies was “critical to protecting American national security interests”.
But a former US official who did not want to be identified said that “just making and populating a list is a provocative act.” An aerospace industry source said it could push China to retaliate.
Industry sources said the inclusion of COMAC would come as a surprise to at least one major US supplier, who determined that the company was not a military end-user.
Industry said the list would provide European competitors with an opening to promote their manufacturers.
General Electric Co. and Honeywell International both supply COMAC and have joint ventures with AVIC.
A GE spokesman said its global joint ventures operate in compliance with all laws, and the company has worked to obtain licenses related to military end-users.
A Honeywell spokesperson declined to comment.
In addition to 89 Chinese lists, the draft rule also includes 28 Russian units, including Irukut, which is aiming to break into Boeing’s market with its MC-21 jetliner development.
117 — The company’s listing is “not exhaustive,” the draft rule states, and is considered an “initial installment”.