On February 18, President Trump tweeted that he would allow General Electric to continue selling jet engines to China. According to Bloomberg News, the move contradicted members of his administration who said that doing so could pose a threat to United States national security, should China reverse-engineer the engines. The Chinese state airliner, Comac, already owns about a dozen engines.
In the tweet, the President cited his concern for American competitiveness: “The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product … that our companies will be forced to leave in order to remain competitive,” he wrote. He also implied that “the national security excuse” was overused.
President Trump’s concern with China’s ability to purchase American goods makes sense in light of his phase one trade deal, in which China agreed to purchase billions of dollars in US manufactured goods, including Boeing products and GE engines. High level meetings next week are set to discuss the technology trade between the United States and China.
Computer chips and cybersecurity are also in the crosshairs of those meetings, though it's less likely the President will intercede in the same way. According to Reuters, officials from the Commerce Department are considering a tweak to the Foreign Direct Product Rule to prevent unlicensed foreign chipmakers from using American equipment to sell computer chips to Huawei. That would prevent any companies using equipment made by KLA, Applied Materials, or Lam Research from selling to the Chinese phone maker.
The United States already blacklisted direct sales from American companies to Huawei in May 2019, but has been frustrated by other countries’ ambivalence towards the company. Huawei has faced bipartisan condemnation from American political leaders, but that wasn’t enough to get Prime Minister Boris Johnson of the U.K. or Chancellor Angela Merkel of Germany to ban Huawei from their developing 5G markets. Huawei has consistently denied that it collaborates with the Chinese State or poses a security risk.
