The Trump administration has intensified the U.S.-China trade war by suspending exports of critical American technologies to China, including jet engine parts, semiconductor design software, specialized chemicals, and industrial machinery. The move follows Beijing's recent decision to restrict shipments of rare earth minerals to U.S. firms. In a further escalation, Washington also announced plans to begin revoking visas for Chinese students in sensitive research fields.
Let's begin with Wednesday's developments: Late in the cash session, markets turned sharply lower after a Financial Times report revealed the Trump administration is pressuring U.S. chip design firms to halt sales to China. The news triggered a marketwide selloff, with chip designer Synopsys closing down nearly 10%.
Then, at 7 p.m. ET, U.S. Secretary of State Marco Rubio posted on X: "The U.S. will begin revoking visas for Chinese students, including those with ties to the Chinese Communist Party or enrolled in sensitive fields of study."
Adding to the trade tensions, sources familiar with the matter told The New York Times overnight that the U.S. Commerce Department had suspended certain export licenses allowing U.S. companies to supply engine parts and technology to China's state-owned aircraft manufacturer, Comac (Commercial Aircraft Corp of China).
Comac has stockpiled engines and parts in anticipation of potential trade restrictions. Still, over time, the move could significantly undermine China's aviation. The company's C919 passenger jet—its flagship jet to challenge rival Boeing and Airbus—relies heavily on GE Aerospace–Safran's LEAP engines.
NYT noted, "China is a long way away from producing enough planes to meet its needs and, analysts say, will continue to be dependent on Boeing and Airbus for planes, and companies like GE Aerospace for jet engines, for many years to come."
The move by the Trump administration to halt critical U.S. jet engine parts and technology to China is a direct response to China's recent export ban on rare earth minerals and magnets, vital for U.S. aerospace, auto, and defense sectors.
In other words, the tit-for-tat non-tariff countermeasures by the world's largest economies are at risk of a deepening supply chain war. This comes as both sides are under a temporary 90-day truce on tariffs, with negotiations underway to resolve trade disputes.
"The Commerce Department is reviewing exports of strategic significance to China," a spokesperson from the federal agency told Bloomberg, adding, "In some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending."
