• The Trump administration is leveraging China's reliance on U.S. aircraft engines and parts as a bargaining chip in trade negotiations.
  • A fragile truce has restored some export licenses, but a proposed 200-jet Boeing (BA) order remains unsettled.
  • Sources say the strategy aims to extract concessions on rare earths and other trade issues, with the current tariff truce set to expire in November 2026.

Aviation as Leverage

The Trump administration has been quietly turning China's dependence on U.S. aviation suppliers into a strategic lever in broader trade negotiations, according to people familiar with the matter. The approach involves using export licenses for critical aircraft components—engines, avionics, and spare parts—as bargaining chips to pressure Beijing on issues ranging from rare earth exports to agricultural purchases.

At the heart of the strategy is China's continued reliance on U.S.-controlled technology for its commercial aircraft. The most immediate example is the LEAP-1C engine, built by CFM International—a joint venture between GE Aerospace (GE) and France's Safran (SAFRY)—which powers COMAC's C919 narrowbody jet. The C919, China's answer to the Boeing 737 MAX and Airbus (AIR.PA) A320neo, entered service in 2023 but remains dependent on imported propulsion systems. Similarly, the C909 regional jet uses GE's CF34 engines.

In May 2025, the U.S. suspended some export licenses for strategically significant technology to China, including GE/CFM engine-related exports supporting COMAC programs. The move came after China restricted exports of rare earths and magnets used in U.S. industry and aerospace. But by July 2025, the U.S. allowed GE Aerospace to resume exports of the LEAP-1C and CF34 engines, signaling a de-escalation tied to wider trade talks and Chinese concessions on rare-earth supply.

A Fragile Détente

That temporary truce has since evolved into a broader negotiating framework. In May 2026, China's account of a Boeing arrangement stated that the U.S. would provide supply guarantees for aircraft engine parts and components, while Beijing announced a proposed purchase of 200 Boeing aircraft. The package was seen as a concrete stabilization signal after years of political friction that had largely shut Boeing out of major Chinese orders.

However, as of late September 2026, the proposed 200-jet deal has not fully crystallized. U.S. Trade Representative Jamieson Greer said roughly 140 aircraft orders were in good shape and about 10 more were being finalized, but expectations for hundreds of additional orders ahead of a Trump–Xi summit had weakened. The incomplete nature of the deal underscores the transactional and conditional nature of the truce.

"What institutional investors like us are really focused on is regulatory stability," said Andrea Valeri, Blackstone (BX)'s country chairman for Italy, speaking at a Bloomberg conference in Milan. While his comments referred to Italy, the sentiment echoes across the aviation industry, where long-term planning is complicated by shifting export controls. Boeing and GE Aerospace, in particular, face uncertainty over recurring revenue from parts and maintenance.

Mutual Dependence

The leverage is not one-sided. China dominates the processing and supply of several rare earths, including yttrium, which is critical for jet-engine manufacturing. Reuters reported that U.S. officials and industry sources view Chinese shipments of yttrium as important for turbine coatings and other aerospace applications. This mutual dependency makes any negotiation a two-sided contest.

For Washington, aviation export controls are potent because they can disrupt China's airline fleet, slow COMAC's scale-up, and hinder Beijing's industrial ambitions. But aggressive use of that leverage could also accelerate China's efforts to develop a domestic engine—the CJ-1000A—and reduce reliance on U.S. technology permanently.

Boeing's management has been in recovery mode under CEO Kelly Ortberg, who took over in August 2024. The company reported 2025 revenue of $89.5 billion, delivered 600 commercial airplanes, and ended with a total backlog of $682 billion, including more than 6,100 commercial aircraft. GE Aerospace posted 2025 revenue of $45.9 billion, up 18%, with orders rising to $66.2 billion. Both companies have significant exposure to the China market.

Political and Economic Context

The current standoff is part of a broader U.S.–China trade and technology confrontation. In 2025, the U.S. imposed tariffs reaching 145% on certain Chinese goods, and China retaliated with tariffs as high as 125%. A 90-day reduction was agreed in Geneva in May 2025 and later extended. Aviation licenses and rare-earth access became practical enforcement mechanisms around that truce.

The then-current tariff and critical-minerals truce was due to expire in November 2026, keeping aviation supply access a live bargaining chip. The U.S. threat in October 2025 to consider export controls on Boeing parts illustrated the point explicitly: China has many Boeing aircraft and depends on the associated supply and maintenance ecosystem.

Industry and Market Implications

Aircraft and engine makers are managing exceptionally large global backlogs, while airlines seek more efficient narrowbody aircraft. The C919's emergence adds a geopolitical dimension to a market long dominated by Boeing and Airbus. Aerospace manufacturers are also examining alternative materials and sourcing because Chinese rare-earth dominance has disrupted supply-chain planning.

For China, the priority is securing predictable access to engines and high-value aviation systems while reducing dependence through domestic substitution. For the U.S., the objective is to protect national-security-sensitive technology and gain bargaining power. The commercial complication is that both governments are negotiating through industries that need long-term certainty—a commercial aircraft can remain in service for decades, so purchasers care about reliable spare parts and maintenance long after delivery.

Outlook

In the short term, the most likely result is continued transactional bargaining. Completion of the 200-aircraft Boeing arrangement would be a concrete stabilization signal, but it would not remove the underlying strategic dispute. The current focus is reportedly on finalizing that package rather than announcing a much larger new commitment.

Longer term, China will likely intensify efforts to localize aircraft engines, avionics, and materials. The U.S. will likely diversify rare-earth and specialty-materials supply to reduce China's counter-leverage. Boeing and GE Aerospace may retain major commercial opportunities in China, but their sales will remain more exposed to diplomacy than in past decades. The risk is not necessarily an immediate aviation embargo; it is a more persistent fragmentation of the global aerospace ecosystem into politically conditioned supply chains.

Spokespeople for Boeing, GE Aerospace, and COMAC did not respond to requests for comment. The Office of the U.S. Trade Representative declined to comment on the specifics of the negotiations.

Correction: An earlier version of this article misstated the year of the proposed 200-jet Boeing order. It was announced in May 2026, not 2025.