Reports that Chinese authorities are instructing airlines not to take further deliveries of US-made Boeing jets in response to the President Donald Trump’s decision to impose 145 per cent tariffs on Chinese goods, could be good news for those waiting in a long queue for new planes.
Bloomberg News reported that China’s top three airlines – Air China, China Eastern Airlines and China Southern Airlines – had planned to take delivery of 45, 53 and 81 Boeing planes respectively between 2025 and 2027.
About 10 Boeing 737 Max jets are being prepared to join Chinese airlines, and if delivery paperwork and payment on some of them were completed before Chinese “reciprocal” tariffs came into effect, the planes may be allowed to enter the country, Bloomberg reported.
But with US-led trade war, planemakers, airlines and suppliers reviewing contracts worth billions of dollars, after US supplier Howmet Aerospace ignited debate over who should bear the cost of the tariffs.
Beijing’s action follows its decision last week to raise levies on US imports to 125 per cent in retaliation against US tariffs, which would significantly raise the cost of Boeing jets bound for Chinese carriers and potentially lead airlines to consider alternatives such as Europe’s Airbus and China’s own domestic manufacturer COMAC.
Confusion over changing tariffs could leave aircraft deliveries in limbo, with some airline CEOs saying they would defer delivery of planes rather than pay duties. But that could be a bonus for Boeing as payments will still need to be made on ordered aircraft and other airlines could jump the queue and receive aircraft destined for the Chinese market.
Beijing has also asked that Chinese carriers halt purchases of aircraft-related equipment and parts from US companies, the Bloomberg report said. But a China ban on imports of new US parts would hit its existing fleet of aircraft, including the COMAC C919.
“If China stops buying aircraft components from the US, the C919 program is halted or dead,” Bank of America analyst Ron Epstein wrote in a note to clients.
Boeing has lost 7 per cent of its market value since the start of the year, and its chief financial officer, Brian West, saying in March that tariffs could hit availability of parts from its suppliers. Boeing has, so far, declined to comment.
The US President also announced he was temporarily suspending planned tariffs on imports of smartphones and laptops with uncertainty around possible tariffs on computer chips and pharmaceutical imports.
