GE GE Aerospace

By Ted Mann 

WASHINGTON -- President Trump said Tuesday that he would support the continued export of U.S.-made jet engines to China, taking sides in a continuing dispute within the administration about restricting high-tech exports over piracy concerns.

"We don't want to make it impossible to do business with us," Mr. Trump said in a series of tweets Tuesday morning. "That will only mean that orders will go to someplace else. As an example, I want China to buy our jet engines, the best in the World."

The tweet suggested that Mr. Trump had come down on the side of General Electric Co. in a debate within his administration, where some hard-liners on China had hoped to halt the export of jet engines being manufactured for a new Chinese-made airliner, the Comac C919.

The White House didn't immediately respond to a request for comment.

GE co-produces the engines in a joint venture with Safran SA of France. It has privately argued that the exports should be allowed to continue, contending fears that the engines could be reverse-engineered were overblown, people familiar with the discussions said.

Mr. Trump's Tuesday-morning tweet stream didn't explicitly mention a related White House debate about limiting Chinese access to chip-making technology. The Wall Street Journal has reported that officials in the administration are considering new trade restrictions aimed at cutting off Chinese access to semiconductor technology.

Mr. Trump didn't directly address the semiconductor issue in his tweets. But the industry thought Mr. Trump's overall message that he didn't want to make it "impossible to do business with us" was a sign that he would oppose new restrictions on their China sales.

"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, chief executive of the Semiconductor Industry Association, in a written statement on Tuesday. "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."

An internal administration meeting was scheduled for later this week to debate the China trade proposals under consideration, including whether to halt the engine shipments. Members of Mr. Trump's cabinet are scheduled to discuss the engine issue, among other trade measures aimed at China, on Feb. 28, according to a person familiar with the matter.

Hard-liners who pushed to block the engine shipments did so in part because they hoped to cripple the development of China's C919 passenger jet, the people familiar with the discussions said. China hopes that the narrowbody airliner, which is scheduled to enter service in 2021, will become a global competitor to the dominant models produced by Boeing Co. and Airbus SE.

But blocking the engine exports would have come as a shock to a major U.S. manufacturer that has invested for years in a global manufacturing footprint, including in China. GE has received licenses from the Commerce Department since 2014 for the engine-export program. The Comac engines are a variant of the LEAP jet engine produced by CFM International, the joint venture of General Electric and Safran. The variant used on the C919 accounts for a small fraction of the total production of LEAP, which has been a commercial success for GE amid a surge in global orders for single-aisle airliners.

As recently as March 2019, the Trump administration had issued new licenses allowing CFM to ship engines to China.

A GE spokeswoman declined to comment on the Trump tweets.

"GE has provided products and services in the global marketplace for decades," a GE spokeswoman said over the weekend, after the Journal reported on the proposal to halt engine shipments. "We aggressively protect and defend our intellectual property and work closely with the U.S. government to fulfill our responsibilities and shared security and economic interests."

Before Tuesday, the people familiar with the discussions said Mr. Trump hadn't weighed in on the trade matter. In his tweets Tuesday morning, the president suggested that he had told members of his cabinet that he had decreed that new restrictions on foreign sales wouldn't be imposed.

"I want to make it EASY to do business with the United States, not difficult," the president tweeted. "Everyone in my Administration is being so instructed, with no excuses...THE UNITED STATES IS OPEN FOR BUSINESS..."

Write to Ted Mann at ted.mann@wsj.com

(END) Dow Jones Newswires

February 18, 2020 12:55 ET (17:55 GMT)

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