As tensions in trade with the United States escalate, China has instructed its airlines to suspend deliveries of Boeing aircraft, Bloomberg reported. The instruction follows US President Donald Trump’s imposition of high tariffs of up to 145 percent on Chinese imports. China retaliated by announcing tariffs of 125 percent on American products, which had a major impact on US aerospace exports.
Sources quoted by Bloomberg stated that Chinese carriers were also directed to cease buying aircraft-related equipment and components from US companies. The new tariffs will likely more than double the price of US-built aircraft and parts, making it economically unfeasible for Chinese carriers to continue taking Boeing jets at existing terms.
China is said to be looking for ways to help its airlines that lease Boeing planes, as those airlines now have higher costs with the imposition of the new tariffs. The move is a bid by Beijing to cushion its aviation industry from the financial hit caused by the trade war.
Boeing Faces Significant Setback in Important Market
This expansion builds on the trouble Boeing already has in China—one of the world’s most significant commercial aircraft markets. In 2018, almost 25 percent of Boeing’s deliveries of aircraft were to China, reports Bloomberg. For the next two decades, China is expected to represent 20 percent of aircraft demand worldwide, and this market is essential to Boeing’s prospects.
But rising trade tensions under both the Trump and Biden administrations have made it difficult for Boeing to win big new orders from China. The 2019 grounding of the 737 Max after two deadly crashes strained relations further. China was the initial country to ground the plane and has since moved a greater percentage of its aircraft purchases to Boeing’s European competitor, Airbus SE.
In January 2024, Boeing suffered another setback when a flight door plug broke off, creating fresh concerns over manufacturing quality. While trade tensions continue, Beijing’s move highlights its dependence on foreign aviation suppliers even as it attempts to scale back US-built planes.
