By Jeff Mason and Makini Brice
WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday blasted proposals that could hinder U.S. companies from supplying jet engines and other components to China’s aviation industry and said he had instructed his administration to prevent such moves.
The president’s intervention illustrated, at least in this case, his desire to prioritise economic benefits over potential competitive pitfalls and national security concerns.
It also contrasts with the sharp restrictions his administration has placed on U.S. companies trading with Huawei Technologies, the world’s largest telecommunications equipment maker, citing national security reasons.
In a series of tweets on Tuesday, Trump said national security should not be used as an “excuse” to make it difficult for foreign countries to buy U.S. products.
“The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product, including for the always used National Security excuse, that our companies will be forced to leave in order to remain competitive,” Trump wrote on Twitter.
“As an example, I want China to buy our jet engines, the best in the World,” he added. Trump later said before departing to California that, “things have been put on my desk that have nothing to do with national security, including chipmakers.”
Trump’s tweets apparently referred to reports over the weekend that the U.S. government was considering whether to block General Electric Co (N:) from continuing to supply engines for a new Chinese passenger jet. But Trump did not provide further details or identify the restrictions, and the White House declined to comment.
“This is ultimately akin to cutting off your nose to spite your face because ultimately you’re hurting U.S. manufacturing companies but you’re not having a material impact on your target,” said trade lawyer Doug Jacobson.
The United States and China, the world’s two largest economies, have a complicated and competitive relationship. Trump signed a first-phase trade deal with China earlier this year after a long trade war in which the countries levied significant tariffs on each others’ products, many of which remain in place.
Washington is also eyeing limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International Inc (N:).
Central to the possible crackdown is whether shipments of U.S. parts to China’s aircraft industry could fuel the rise of a serious competitor to U.S.-based Boeing Co (N:) or boost China’s military capabilities.
The Semiconductor Industry Association (SIA) said it welcomed Trump’s comments.
“We applaud President Trump’s tweets supporting U.S. companies being able to sell products to China and opposing proposed regulations that would unduly curtail that ability,” said John Neuffer, the group’s president, in a statement. “As we have discussed with the administration, sales of non-sensitive, commercial products to China drive semiconductor research and innovation, which is critical to America’s economic strength and national security.”
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