Unleashing the Trade War Collateral: US Halts Exports of Nuclear Power Equipment to China
U.S. Halts Authorization for Exporting Nuclear Power Plant Components to China
Washington's recent move targets supplies of nuclear equipment to China. Four sources in the know confirm that the US Department of Commerce has slapped the brakes on nuclear equipment exports for Chinese power plants. The suspensions apply to parts and equipment essential for nuclear power plants.
The US-China trade feud has morphed from imposing escalating tariffs into a strategy of choking each other's supply chains. It remains unclear whether a call between US President Donald Trump and Chinese President Xi Jinping scheduled for Thursday could alter these restrictions.
While the US and China agreed on May 12 to roll back tariffs for 90 days, the diplomatic thaw quickly ran aground. US allegationsAgainst China for reneging on agreements concerning rare earth elements and China's accusations against US "abuse of export control measures" by implying that using Huawei Ascend AI chips anywhere globally violates US export controls have further fanned the flames. Post-Thursday call, discussions on crucial subjects were slated for future sessions.
The US Department of Commerce chose silence when asked about the nuclear equipment restraints. On May 28, a department spokesperson hinted at a review of strategic exports meaningful to China. "In certain instances, Commerce has temporarily halted existing export licenses or imposed additional license conditions during the review process," the spokesperson stated in a declaration. The Chinese Embassy in Washington did not respond to a request for comment.
A stellar lineup of US nuclear equipment suppliers includes Westinghouse and Emerson. Westinghouse, with technology used in over 400 nuclear reactors worldwide, and Emerson, providing measurement and other nuclear-related tools, refused to comment on the matter.
These suspensions could cut hundreds of millions of dollars from business deals, according to two sources. Furthermore, they coincide with Chinese restrictions on critical metals, which pose a threat to global supply chains, particularly America's leading automakers.
Reuters was unable to ascertain whether the new restrictions are directly linked to the trade war or how quickly they may be reversed. Typically, Department of Commerce export licenses carry a four-year validity with detailed authorized quantities and values. Recently, a deluge of new restrictions on exports to China has been imposed in the past two weeks, encompassing licenses for a hydraulic fluids supplier and GE Aerospace for jet engines for China's COMAC aircraft. Moreover, the US now requires licenses to ship ethane to China, as first reported by Reuters last week. Houston-based Enterprise Product Partners revealed that requests to complete three ethane shipments to China, totaling approximately 2.2 million barrels, have not been granted. Moreover, a requirement for a license to export butane to China, in addition to the ethane, was subsequently revoked. Dallas-based Energy Transfer was notified about the new ethane licensing requirement on Tuesday and plans to apply and file for an emergency authorization.
Beyond the energy and aerospace sectors, companies dealing in electronic design automation software, such as Cadence Design Systems, have also faced new restrictions in the recent trading skirmishes.
Despite these measures, China remains determined to advance its nuclear power development, focusing on indigenous technologies to meet its energy demands.
- The suspension of nuclear equipment exports from the US to China, as a result of the US Department of Commerce's decision, could significantly impact the values associated with business deals involving companies like Westinghouse and Emerson.
- The US-China trade war has expanded beyond imposing tariffs, now including political maneuvers such as the recent restrictions on exports of strategic items like nuclear equipment and critical metals, affecting industries such as general-news reporting and electronic design automation software.
