U.S. Commerce Department slows down export licenses for Chinese aircraft parts

According to people familiar with the matter, the U.S. Department of Commerce is slowing down exports of aircraft parts to China. (Reuters photo)

[Financial Channel/Comprehensive Report] According to people familiar with the matter, the Trump administration has been taking measures to turn China's dependence on U.S. aviation suppliers into a bargaining chip in trade negotiations. Currently, the U.S. Department of Commerce has slowed down the issuance of export licenses for aircraft parts sold to China.

"Reuters" reported that the United States is trying to slow down exports of important materials to China, indicating that the United States is trying to strengthen its bargaining chip in trade negotiations. Washington is also trying to weaken Beijing's control of rare earth minerals, which are essential raw materials for many American industries, including automobiles, chip manufacturing and aerospace. Two people familiar with the matter said the Commerce Department is ready to increase pressure on Beijing if requested by the U.S. government.

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The U.S. Commerce Department has slowed the issuance of export licenses for Chinese aircraft parts in recent weeks, people familiar with the matter said, and officials also revealed that Washington intends to issue an export control rule to make it easier to restrict the export of landing gear and other aircraft parts to China. One of the people said the draft includes a new licensing requirement for aviation hydraulic fluids shipped by U.S. suppliers such as ExxonMobil.

Another person familiar with the matter said that the U.S. Commerce Department has been limiting the number of parts exported to Chinese state-owned aircraft manufacturer COMAC to prevent the company from hoarding parts.

In response to the report, neither the U.S. Department of Commerce nor the White House responded; the Chinese Embassy in the United States also did not immediately respond. After the United States imposed export controls last year due to trade tensions, a Chinese embassy spokesman accused the United States of "abusing export controls."

Chinese President Xi Jinping visited the United States last week and held talks with Trump in Washington. After the meeting, the United States and China entered a new period of relaxation. The two sides agreed to simultaneously reduce import tariffs on a variety of goods and extend the trade truce that was originally scheduled to expire on November 10 to January 10 next year, giving negotiators from both sides more time to deal with thorny issues.

The world's two largest economies engaged in a fierce battle over aircraft parts last year, with moves to restrict the flow of commercial aircraft parts between the two countries raising concerns that aircraft could become a new weapon in trade negotiations.

Although U.S. President Trump has imposed tariffs on many industries and trading partners around the world, the aerospace industry has been largely unaffected. However, the industry has been facing shortages of parts and raw materials due to geopolitical tensions. For example, producers of thermal spray coatings used to protect jet engines are still grappling with China's controls on rare earth materials, which is causing delays.

China has asked the United States to provide parts for several years for the 200 Boeing planes it agreed to buy last spring, people familiar with the matter said, marking the U.S. aircraft giant's first major deal with a Chinese airline in nearly a decade. But the United States has been reluctant to give guarantees because Washington regards these parts as bargaining chips in future negotiations.

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