Bloomberg reported that people with knowledge of the situation said China had instructed its airlines not to accept any more Boeing aircraft deliveries and to stop purchasing aircraft parts and equipment from US suppliers.
This directive was issued after US President Donald Trump levied tariffs up to 145% against Chinese imports. Beijing retaliated swiftly.
Boeing’s commercial jet division, which is heavily reliant on Chinese demand, has suffered a major blow.
China announced its latest tariffs on American aircraft over the weekend. The levy is 125%, which effectively doubles their price and makes new deliveries unfeasible for Chinese airlines.
According to sources in the report, the Chinese government could also offer relief to domestic airlines that lease Boeing aircraft and are now facing sharply higher costs.
The overall message, however, is very clear. Boeing, which was once one of the key beneficiaries of China’s aerospace boom, has now been caught up in geopolitical brinkmanship.
Boeing’s share price dropped 2.64% during pre-market trading hours Tuesday as a result of the news.
Boeing delivers dozens of jets, but they are still in the limbo.
According to Aviation Flights Group, around 10 Boeing 737 Max aircraft are reportedly awaiting shipment to Chinese carriers, such as China Southern Airlines and Air China.
Some aircraft have been stationed at Boeing’s Seattle facility, and others are now in Zhoushan’s Zhoushan Finishing Center.
According to industry sources, some of the planes could still be delivered if payment and delivery documents were completed before China’s new tariffs went into effect on April 12th.
Source : Bloomberg
Approvals are made on an individual basis and there is no guarantee.
Boeing and the Civil Aviation Administration of China did not respond to comment requests. Chinese Airlines involved in pending deliveries declined to comment.
Juneyao Airlines, which was due to receive a Boeing Dreamliner 787-9 Dreamliner within a few weeks, has delayed its arrival. This is another sign of the changing sentiments among Chinese airlines.
Boeing’s Future is affected by China’s Long-Term Aviation Strategy
Boeing’s position on one of the most important aviation markets in the world is under threat as a result of this standoff.
China is expected to account for around 20% of global aircraft demand in the coming two decades. Nearly a quarter (25%) of Boeing deliveries in 2018 were headed for China.
Recent years, however, have seen an abrupt drop in the number of new orders. This is due to both internal and geopolitical issues.
China is the first nation to have grounded the 737 Max following two deadly crashes that occurred in 2018 and 2019.
Airbus, Boeing’s European competitor, has been gaining ground as a result of the trade tensions between Biden and Trump.
Boeing has suffered a reputational blow more recently when the door panel of a Boeing 737 Max blew away mid-flight on January 20, 2024.
China is still reliant upon foreign suppliers to supply a large part of its aircraft fleet, despite efforts to develop a more independent aviation industry.
Airbus is the dominant player in aircraft production, whereas China’s Comac C919 has just begun its commercial operation.
Many Chinese airlines still operate large Boeing aircraft that need ongoing maintenance, and spare parts are also needed. These services could be at risk.
The report China stops Boeing jet deliveries amid US-China Trade Tensions may change as new developments unfold.
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