China has asked its airlines to suspend the purchase of Boeing jets from the US over the ongoing trade war between both countries after the U.S. decision to impose 145% tariffs on all Chinese goods.
According to Bloomberg, 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. The Chinese Government also asked that Chinese carriers halt purchases of aircraft-related equipment and parts from U.S. companies.
Impact on Boeing
In the aftermath of the announcement, Shares of Boeing, which looks at China as one of its biggest growth markets and where rival Airbus holds a dominant position, were down 3% in premarket trading while Airbus shares were up 1%.
This could not have come at a worse time for Boeing who had said it expected China to more than double its commercial airplane fleet by 2043 to meet growing demand for passenger and cargo air travel, hence seeing an opportunity to expand.
Boeing is currently navigating a slow recovery following a challenging year marked by a labor strike, enhanced regulatory scrutiny and persistent supply chain disruptions after two of its airlines fatally crashed in 2018 and 2019 killing nearly 350 people.
This latest setback benefits Boeing’s European rival Airbus and Chinese state-backed manufacturer Commercial Aircraft Corporation of China (COMAC), which has been striving to position its flagship narrowbody jet, the C919, as a viable alternative to foreign aircraft like the Boeing 737 MAX and the Airbus A320neo within the domestic market.
