The United States’ escalating trade war with China could hit Boeing’s future orders and deliveries, according to new reports Tuesday.
China has reportedly ordered its airlines not to take future deliveries of Boeing planes or purchase aircraft-related equipment and parts from U.S. companies, according to a Bloomberg article Tuesday, citing anonymous sources.
The Chinese government also reportedly told Chinese airlines not to place new orders for Boeing jets and is requiring carriers to seek approval before taking delivery of aircraft they have already ordered, according to a Wall Street Journal article also published Tuesday.
President Donald Trump weighed in, writing on the social media platform Truth Social that China “just reneged on the big Boeing deal” and “will ‘not take possession’ of fully committed to aircraft.” Trump’s post was mainly about a separate deal between the U.S. and China related to farmers.
Bloomberg and The Wall Street Journal said China made the directives in response to tariffs imposed by Trump that went into effect last week. Those tariffs would reach 145% on goods imported from China.
In return, China imposed its own 125% tariff on goods from the United States.
Boeing and the aerospace industry, like many other economic sectors, have been bracing for some fallout from the new tariffs. In the worst-case scenario, the levies could increase the cost of airplane parts and the finished product, disrupt the industry’s extensive supply chain and lower demand if the U.S. dips into a recession.
Boeing, which declined to comment on Tuesday, previously said it will have some cushion to soften the immediate blow of the tariffs.
Boeing has a large inventory of airplane parts and a large backlog of airplane orders, giving its suppliers and customers room to adapt if needed, Chief Financial Officer Brian West said at a Bank of America conference last month.
“If a customer needed some flexibility because of some decisions that they were making, we can move around in a big backlog and try to accommodate best we can,” West said. “So, we think we’ve got enough room to breathe.”
China is a key market for Boeing but the country scaled back its orders after Trump imposed tariffs during his first administration and two deadly 737 Max crashes in 2018 and 2019. Still, a long-term decision to halt Boeing deliveries to China’s airlines could impact dozens of unfilled orders.
China has 130 unfilled orders on Boeing’s books, according to a list on the airplane manufacturer’s website. But analysts suspect that number is higher because a chunk of the 762 unfilled orders listed for unidentified customers are also likely headed to China.
Of the 130 planes Boeing delivered to customers so far this year, 18 went to China, according to Boeing’s website.
Boeing’s stock dropped 2.3% on Tuesday following the news reports.
Also on Tuesday, China Southern, one of the country’s main airlines, suspended the sale of 10 used Boeing 787-8 Dreamliner aircraft, according to a separate Bloomberg report. That decision, also prompted by the tariffs, indicated a rippling effect of the trade war beyond just the purchase of new goods, Bloomberg reported.
© American Military News
