U.S. targets Chinese firms with 'military ties'

U.S. President Donald Trump is getting ready to amp up pressure on China with a new trade blacklist.

A draft seen exclusively by Reuters lists 89 Chinese companies the Commerce Department says have ties to the military.

It includes Commercial Aircraft Corp of China - or COMAC: a rising star with its sights set on Boeing and Airbus.

Not all companies in the list are Chinese. Some are Russian. But the U.S. considers all of them "military end users".

Being on the list means they can't buy some U.S. products - from aircraft engines to word processing software.

The Commerce Department called the restrictions "vital for protecting U.S. national security interests."

But there are fears that U.S. companies could end up getting hurt, too.

It's a sensitive time for the American aerospace industry.

Boeing had its 737 MAX cleared by U.S. regulators just last week.

It's now seeking approval in China - the first nation to ban the MAX after two fatal crashes of the model.

The list could also mean a hit for General Electric and Honeywell - both have ties to COMAC.

According to the draft, U.S. companies will need a license to sell to anyone on the list.

However, it also says that applications are more likely to be denied than granted.

Video Transcript

- US President Donald Trump is getting ready to amp up pressure on China with a new trade blacklist. A draft seen exclusively by Reuters lists 89 Chinese companies the Commerce Department says have ties to the military. It includes Commercial Aircraft Corp of China, or COMAC, a rising star with its sights set on Boeing and Airbus. Not all companies in the list are Chinese, some are Russian, but the US considers all of them, quote, "military end users."

Being on the list means they can't buy some US products, from aircraft engines to word processing software. The Commerce Department called the restrictions, quote, vital for protecting US national security interests. But there are fears the US companies could end up getting hurt too.

It's a sensitive time for the American aerospace industry. Boeing had its 737 Max cleared by US regulators just last week. It's now seeking approval in China, the first nation to ban the MAX after two fatal crashes of the model. The list could also mean a hit for General Electric and Honeywell. Both have ties to COMAC.

According to the draft, US companies will need a license to sell to anyone on the list. However, it also says that applications are more likely to be denied than granted.