In latest China jab, U.S. drafts list of 89 firms with military ties

(Reuters) – The Trump administration is close to declaring that 89 Chinese aerospace and other companies have military ties, restricting them from buying a range of U.S. goods and technology, according to a draft copy of the list seen by Reuters.

The list, if published, could further escalate trade tensions

with Beijing and hurt U.S. companies that sell civil aviation parts and components to China, among other industries.

A spokesman for the U.S. Department of Commerce, which produced the list, declined to comment. The Chinese foreign ministry did not immediately respond to a request for comment.

Commercial Aircraft Corp of China Ltd (COMAC), which is spearheading Chinese efforts to compete with Boeing and Airbus, is on the list, as is Aviation Industry Corporation of China (AVIC) and 10 of its related entities. The list is included in a draft rule that identifies Chinese and Russian companies the U.S. considers “military end users,” a designation that means U.S. suppliers must seek licenses to sell a broad swath of commercially available items to them.

According to the rule, applications for such licenses are more likely to be denied than granted.

U.S President Donald Trump has stepped up his actions in recent months against China. Ten days ago, he unveiled an executive order prohibiting U.S. investments in Chinese companies that Washington says are owned or controlled by the Chinese military.

The pending list comes after the Commerce Department expanded the definition of “military end user” in April. [L2N2CF0JS] The April rule includes not only armed service and national police, but any person or entity that supports or contributes to the maintenance or production of military items — even if their business is primarily non-military.

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