Economy Trump blames his hardliners and blocks sales in China

Trump blames his hardliners and blocks sales in China

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President Donald Trump intervened to stop the development of his own government’s plans to block the sale of General Electric engines to China and other proposed restrictions on American exports, and stated that national security was overused by his own officials to restrict American companies. Ability to trade with China.

“We don’t want to make it impossible to do business with us,” Trump said in a tweet Tuesday. “It just means that orders go somewhere else.”

The President’s intervention is a rare public reprimand by some government hardliners for China, who have introduced stricter rules to restrict US technology sales to Beijing – from semiconductors to jet engines. It also comes when Trump announces a “phase 1” deal with China to stimulate a $ 200 billion Chinese spending spree for American exports, including commercial jets and other manufactured products.

Senior officials were expected to decide by the end of this month whether to block jet engine exports to China by a joint venture between General Electric Co. and French Safran SA for use in the Chinese C919’s Commercial Aircraft Corporation -Single-aisle passenger aircraft were manufactured, according to three people who are familiar with the problem, flight tests are being carried out. They also considered expanding sales restrictions from US and overseas suppliers to Huawei Technologies Co.

The president later told reporters Tuesday that his concern about the use of the “wrong concept of national security” extended to new proposed Huawei regulations aimed at restricting chip access.

“I mean things are put on my desk that have nothing to do with national security, including chip makers and various others,” Trump said as he left Washington. “I was very tough with Huawei, but that doesn’t mean we have to be tough on everyone who does something. We want to be able to sell all of this incredible technology – we’re number one in the world.”

Hawks vs. Doves

Trump’s tweets on Tuesday have publicized the bitter struggle between two factions in his government in recent years. One group sees China’s economic rise as an existential challenge for the USA and advocates a “decoupling” of the two economies. Others think such a move is too extreme and argue that it poses a risk to US power and innovation.

The President’s comments also came as another crucial moment was approaching.

Both the potential restrictions on GE, Huawei, and other policies related to China should be discussed by senior officials on Thursday before a cabinet-level meeting scheduled for February 28, the people familiar with the proposals said. The measures appeared to be supported by several agencies, including the Department of Commerce.

“I have seen some of the regulations circulated, including those considered by Congress, and they are ridiculous,” Trump tweeted.

Trump also pointed out in his posts that his concern over Chinese hardliners’ calls within his government went beyond jet engines. He is on the side of those in his administration who have advocated a more business-friendly approach to China.

“We want to sell products and goods to China and other countries. That’s what trading is about. We don’t want to make it impossible to do business with us. It just means that orders go somewhere else, ”he tweeted.

The intervention is not the first that Trump has taken against its China hardliners. In May 2018, he overruled his own trade department on behalf of the blacklisted Chinese telecommunications company ZTE after calling the Chinese leader Xi Jinping.

Derek Scissors, who has followed the conservative U.S.-China relations at the conservative American Enterprise Institute and advised the Trump administration in the past, said Trump appeared in his tweets about those in Congress and in his own administration, the restrictions see pushing the nose technology and other exports to China as a national security priority. “He is currently taking care of the trade balance,” said Scissors.

The president did not respond directly to the proposed changes on Tuesday, which were also discussed in connection with Huawei. In the past, however, he has spoken out against sales restrictions by American suppliers for non-sensitive products to the Chinese company. “I like it when our companies sell things to other people,” he told reporters in Japan last year after meeting Xi, where he agreed to allow sales to Huawei.

Huawei, which has long been exposed to US accusations of being a channel for Chinese espionage, was blacklisted by the Department of Commerce last year, effectively banning US suppliers from doing business with it. Huawei has contested such claims.

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The new measures under consideration are largely aimed at semiconductor exports and partly at a broader administrative campaign to convince allies not to use Huawei devices in new fifth generation communication networks. These efforts were further reinforced at a security conference in Munich this weekend.

The government is now speaking of closing a void that will allow American companies to use overseas manufacturing facilities to sell less than 25% US materials by lowering this limit to 10%. The amendment to the so-called “foreign direct products rule” is also discussed to further limit Huawei’s access to products based on US technology and manufactured by non-US companies overseas.

Semiconductor industry

Trump’s tweets on Tuesday were welcomed by the Semiconductor Industry Association, which is campaigning against the new Huawei restrictions, arguing that they would “unduly restrict” US companies’ ability to sell products to China.

“As we discussed with the government, selling non-sensitive commercial products to China is driving semiconductor research and innovation, which is critical to America’s economic strength and national security,” said John Neuffer, president and CEO the SIA.

China’s foreign ministry earlier on Tuesday accused those who want to ban exports of GE engines “want to suppress China”.

“What’s worse, it will seriously disrupt bilateral and even global exchanges and cooperation in science, technology, and commerce,” Foreign Ministry spokesman Geng Shuang told reporters in Beijing.

Discussions about banning the sale of the GE / Safran Leap 1C engine to China were first reported by the Wall Street Journal last weekend. Some officials wondered if the sale could help Chinese companies reverse engineer technology and accelerate the development of their own engine programs.

GE stocks fluctuated on Tuesday, gained after Trump’s comments, and later gave way.

GE, which has worked hard to be excluded from a promising new market, announced in a statement Monday that it has decades of experience selling products internationally. “We aggressively protect and defend our intellectual property and work closely with the United States government to meet our responsibilities and our common security and economic interests,” said a company spokesman in an emailed statement.

The engine has been approved for sale to China several times since 2014, and a dozen of the engines have already been delivered to Comac, Bloomberg reported on Monday.

(Updates to paragraphs five and six with Trump quotes)

– With the support of Bill Faries and Richard Clough.

To contact the reporter about this story: Shawn Donnan in Washington at [email protected]

To contact the editors responsible for this story: Margaret Collins at [email protected], Sarah McGregor

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