Editor's note: Fred Teng, the president of AmericaChina, is also recognized as an honorary fellow of the Foreign Policy Association, a senior advisor to the China-United States Exchange Foundation, an executive council member of the Center for China and Globalization, and a visiting professor at the School of International Studies, Sichuan University. The perspectives in this article represent the author's views and do not necessarily align with the views of CGTN.

In a notable intensification of tensions between the United States and China, the U.S. Commerce Department has enacted a suspension of export licenses for aviation technologies destined for the Commercial Aircraft Corporation of China, Ltd., a state-owned manufacturer. This suspension notably affects the LEAP-1C engine, manufactured by CFM International, a partnership between General Electric and France's Safran, which powers China's C919 airliner.

The intention behind this action is to limit China's aerospace aspirations; however, it poses significant risks to U.S. industry, the workforce, and long-term competitiveness. The aerospace sector is integral to the U.S. manufacturing landscape, with major companies like General Electric and Honeywell historically supplying engines and avionics to global aircraft manufacturers, COMAC included. The revocation of export licenses threatens to sever these vital partnerships, potentially costing General Electric a considerable sum in lost revenue and impacting its extensive domestic supply chain.

The ramifications of these export controls extend far beyond corporate financials. Numerous American jobs—ranging from engineers to factory workers—are interconnected through aircraft engine production and maintenance. Entire regions dependent on aerospace contracts could face economic instability. Small and medium-sized enterprises in the supply chain, characterized often by their thin profit margins, are particularly susceptible to order cancellations and prolonged disruptions.

From a strategic standpoint, these export restrictions may unintentionally yield counterproductive outcomes. While COMAC has historically depended on foreign components—which has limited its global competitiveness—cutting off U.S. technology could expedite China's quest for self-sufficiency. The Chinese government is already making substantial investments in developing indigenous engine capabilities, potentially leading to the permanent exclusion of U.S. suppliers from an aviation market poised to be the largest worldwide.

This scenario within the aerospace sector reflects a broader trend impacting the entire technology industry. Over recent years, U.S. administrations have increasingly implemented export controls to stymie China's advancements in key technological arenas. Key milestones in this escalation include the 2018 Export Control Reform Act, which expanded executive powers to impose export restrictions, and subsequent actions targeting companies such as Huawei, leading to tighter controls on crucial technologies.

The economic impact of these measures has proven steep. For instance, Nvidia reported a staggering $2.5 billion loss in a single quarter due to restrictions on AI chips, with projections indicating an additional $8 billion in possible future losses. The semiconductor sector, heavily reliant on Chinese demand, has faced declining sales and a diminishing global market share.

The consequences are reverberating across the nation, as U.S. manufacturing has contracted for three straight months as of May 2025—evident in plummeting orders, reduced production, and dwindling hiring rates. Small and medium-sized enterprises providing components to both aerospace and technology supply chains are grappling with challenging circumstances, uncertain futures, and declining demand.

Notably, these restrictions have inadvertently bolstered China's desire for technological independence. Firms such as Huawei and SMIC have made significant progress in developing domestic capabilities in chip and telecommunications, thereby decreasing their reliance on U.S. suppliers. This movement risks diminishing U.S. influence over global industry standards and could ultimately weaken America's competitive position.

In the realm of diplomacy, the imposition of these controls has stressed relations with allies and raised concerns among trading partners. Incorporating these restrictions into trade agreements could further alienate U.S. firms from international markets, with nations increasingly questioning the reliability of the U.S. as a stable technology provider.

While maintaining national security is undoubtedly a legitimate concern, the current approach of broadly applying export controls against China has produced unintended consequences detrimental to U.S. jobs, innovation, and international standing. A more nuanced strategy that differentiates between genuine security threats and commercial rivalry, while emphasizing revitalizing U.S. research and development, enhancing domestic manufacturing capabilities, and promoting international cooperation, may prove more effective.