China has recently told its airlines to stop taking new deliveries of Boeing jets. This decision comes after the United States raised tariffs (taxes on goods) on Chinese products by 145%. Bloomberg News reported this news on Tuesday, quoting people familiar with the situation.
Boeing, which sees China as one of its largest markets for growth, saw its stock drop by 0.5% on the day the news broke. Boeing faces stiff competition in China, where the European company Airbus has a strong position.
The trade war between the U.S. and China is having a big effect on the global aviation industry. Aircraft makers, airlines, and suppliers are all rethinking their contracts, which are worth billions of dollars. This started after Howmet Aerospace, a supplier in the U.S., stirred up discussions on who should pay the tariffs.
Because of the changing tariffs, there is confusion about how aircraft deliveries will go. Some airline bosses have even said they might delay receiving new planes rather than pay the extra costs due to the tariffs.
China’s top three airlines – Air China, China Eastern Airlines, and China Southern Airlines – were planning to receive a lot of Boeing planes in the coming years. These airlines had orders for 45, 53, and 81 Boeing jets, respectively, between 2025 and 2027.
The Chinese government has also asked airlines in China to stop buying parts and equipment for planes from U.S. companies. However, Reuters couldn’t confirm if this is a blanket ban.
Experts say that a short delay in deliveries to China may not cause major issues for Boeing. Boeing can sell these planes to other countries, and Airbus, its biggest competitor, doesn’t have enough planes to meet all of China’s demand. However, if China stops buying U.S. parts to support its existing airplanes, it could create problems. For example, China’s C919 airplane program could be in serious trouble, as it depends on U.S. parts.
The Chinese government is looking into ways to help airlines that use Boeing jets and are now facing higher costs because of the tariffs.
This is not the first time China has had issues with Boeing. After two deadly crashes involving Boeing’s 737 MAX jets in 2018 and 2019, which killed nearly 350 people, China was the first country to ground the jets. Later, China also stopped most orders for the 737 MAX.
Boeing has not commented on the situation. This halt in deliveries to China is another challenge for Boeing. The company has already faced a tough year with problems like a labor strike, tighter government rules, and ongoing supply chain issues.
This move by China follows its recent decision to increase taxes on U.S. goods, including Boeing jets. This means Boeing jets will cost even more for Chinese airlines, and they might consider buying planes from Airbus or a Chinese company, COMAC, instead.
Since last year, Boeing’s stock has dropped significantly, partly because of a new problem with one of their jets. The trade war between the U.S. and China is becoming more intense, and it’s hurting trade between the two countries. In 2024, the value of goods traded between them was over $650 billion, and this ongoing trade conflict could bring that trade to a halt.
