Boeing Air China. Credit: Shutterstock, Vytautas Kielaitis
China has reportedly ordered its airlines to suspend all deliveries of Boeing jets.
Bloomberg News, cited by Reuters, reported that Chinese authorities instructed major carriers – including Air China, China Eastern, and China Southern – to halt future deliveries of Boeing jets due to the steep tariffs imposed by Trump of up to 145 per cent.
Shares in Boeing dropped slightly as a result of the report, falling by 1 per cent, according to CNN. Boeing, China’s second-largest aircraft supplier after Airbus, has not publicly commented on the matter, and neither have Chinese officials, or the White House.
Boeing considers China one of its most crucial growth markets, with its own analysis predicting that Chinese airlines will need 8,830 new planes over the next 20 years.
However, Boeing’s sales in China have drastically declined. Between 2017 and 2018, it received orders for 122 aircraft from Chinese customers. In the six years since, that number has dropped to just 28.
The downturn isn’t solely due to political tensions. Boeing’s own troubles, including the grounding of the 737 MAX after two fatal crashes in late 2018 and early 2019, also played a role. These crashes killed 346 people, leading to a global grounding of the aircraft.
Implications for Boeing due to trade war
The halt could have major implications for Boeing, which builds all its aircraft in the United States and exports nearly two-thirds of them overseas. The company contributes approximately $79 billion to the US economy and supports about 1.6 million jobs, according to CNN. It employs close to 150,000 people in the US alone.
By the end of 2024, Boeing had 55 undelivered aircraft in inventory – the majority of which were earmarked for China and India. Deliveries are critical to Boeing’s business model, as the company is only paid in full once the aircraft is handed over.
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