In retaliation to US tariffs, China halts aircraft deliveries and component purchases, a move that could strain Boeing’s prospects.
In an intensifying trade dispute, China has directed its airlines to halt any further Boeing jet deliveries, according to a Bloomberg News report dated April 15. This action follows the imposition of a 145 per cent tariff on Chinese goods by US President Donald Trump, a decision that has triggered significant repercussions in the global aerospace sector.
Shares of Boeing, a company that relies heavily on China as a growth market, saw a 2 per cent drop in early trading following the news. Despite Boeing’s strong presence in the region, Airbus has long dominated the Chinese market.
The aerospace industry is facing an escalating tariff war, with various stakeholders, including planemakers, suppliers, and airlines, reassessing multi-billion-dollar contracts due to the ongoing trade tensions. The conflict was sparked by US supplier Howmet Aerospace, whose actions led to a broader debate about the responsibility for bearing tariff costs.
China’s three major airlines – Air China, China Eastern Airlines, and China Southern Airlines – had planned to receive 45, 53, and 81 Boeing planes, respectively, between 2025 and 2027. However, with the suspension of deliveries, these plans are now in jeopardy. Additionally, the Chinese government has asked airlines to stop purchasing aircraft parts and equipment from American companies, which is expected to drive up the cost of maintaining the jets already in operation.
The government is also exploring measures to support airlines that lease Boeing jets, which will likely face higher costs due to the halted deliveries and equipment purchases.
This move by China follows a history of tensions with Boeing. In 2019, China grounded the Boeing 737 MAX after two deadly crashes, and the country had already suspended most orders and deliveries of the jet that same year.
Boeing, which has been navigating a slow recovery after facing labour strikes, regulatory scrutiny, and supply chain issues, did not immediately comment on the suspension.
This delivery halt represents another setback for Boeing, which is already dealing with difficulties stemming from increased US tariffs. The levies, which rose to 125 per cent last week, significantly impact the cost of Boeing aircraft intended for Chinese airlines. As a result, airlines may look to alternatives, such as Airbus or domestic manufacturer Comac.
Boeing’s financial struggles have worsened since a door panel incident on a new MAX 9 jet in 2024, causing further challenges for the company.
The ongoing escalation of tariffs between the US and China could lead to a significant slowdown in bilateral trade, which was valued at over US$650 billion (S$856 billion) in 2024, according to analysts.
