US May Block Delivery of Thousands of Aircraft Engines to China Amid Tech Theft Claims – Report

Last week, the Justice Department slapped criminal charges on Chinese telecoms giant Huawei and two of its US subsidiaries, accusing them of racketeering and the theft of trade secrets. The company dismissed the allegations as “utter nonsense.”

The Trump administration may move to block deliveries of General Electric and French Safran SA developed LEAP 1C jet engines to China amid renewed tensions over alleged technology theft, multiple sources said to be familiar with discussions on the matter have told the Wall Street Journal. An inter-agency cabinet meeting on the issue is expected to take place on Thursday, with another expected February 28 to discuss the engines and other China trade-related policies. Along with the GE/Safran engines, the restrictions may apply to other US-made components for Chinese airliners, including Honeywell International flight control systems. Honeywell had earlier expressed interest in building the flight control system for the CRAIC CR929, a Russian-Chinese long-range wide body twinjet airliner currently in development.The Comac C919 made its first flight in May 2017, with commercial deliveries planned to begin as soon as next year. The plane, intended to compete with the Boeing 737 MAX and the Airbus A320neo, has over 300 firm orders and over 1,000 commitments from over two dozen Chinese airlines and companies.

The technology-related conflict between Washington and Beijing comes a month after the signing of the so-called Phase One trade deal, which committed China to purchase some $200 billion in US goods over the next two years. Washington, meanwhile, plans to keep heightened tariffs on Chinese goods in place until a second and final phase of the trade agreement can be negotiated and agreed at a later date.

US-China technology-related tensions spiked earlier this month after Washington slammed its UK allies over Prime Minister Boris Johnson’s decision to allow Chinese telecommunications giant Huawei to build part of the UK’s 5G infrastructure.

Last week, the US hit Huawei and two of its subsidiaries with fresh criminal charges accusing the multinational of the theft of intellectual property from six US companies in a scheme stretching back over twenty years. Prosecutors in a New York court accused the tech company of directing employees to steal from US firms and promising bonuses to those who could procure the most valuable information. The fresh charges compounded those unveiled against the company in 2019, when it was alleged that Huawei had stolen trade secrets from T-Mobile. Huawei dismissed the new allegations, saying they had “nothing to do with facts and reality.” The company’s vice president, meanwhile, suggested that Washington seems to be hoping that if it “throws enough mud, some of it will stick”.

Despite the new charges, Washington issued another 45 extension Friday allowing US tech companies to continue to do business with Huawei, with the waivers issued repeatedly since May 2019, when Washington formally blacklisted the company. Companies like Microsoft and Intel have been allowed to continue selling components, services and technology to Huawei amid fears of multi-billion-dollar losses if commercial contracts are cut.