Bloomberg reports China Orders Boeing Jet Delivery Halt as Trade War Expands

China has ordered its airlines not to take any further deliveries of Boeing Co. jets as part of the tit-for-tat trade war that’s seen US President Donald Trump levy tariffs of as high as 145% on Chinese goods, according to people familiar with the matter.

Beijing has also requested that Chinese carriers halt any purchases of aircraft-related equipment and parts from US companies, the people said, asking not to be identified discussing matters that are private.

The order came after China unveiled retaliatory tariffs of 125% on American goods this past weekend, the people said. Those levies on their own would have more than doubled the cost of US-made aircraft and parts, making it impractical for Chinese airlines to accept Boeing planes.

The Chinese government is also considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, the people said.

How Important is China to Boeing?

The Wall Street Journal adds additional details in China Goes After Boeing

Cutting off deliveries to China could dent revenue for the cash-strapped jet maker, which has been working to clear out parked planes and ramp up production and deliveries amid a quality crisis. Longer-term, the Chinese market is crucial; Boeing has forecast it will account for a fifth of the world’s airplane deliveries in the next two decades.

Of 130 airplanes Boeing delivered globally this year through March, 18 went to Chinese airlines. Boeing delivered two planes to Chinese airlines earlier this month, according to data from Cirium.

China halted deliveries of Boeing jets following a pair of fatal MAX crashes in 2018 and 2019 and had only resumed taking planes last summer.

Another Lose-Lose Move

This is another spat with only losers. Boeing (BA) gets cancelled orders but China does not get maintenance parts if and when needed.

However, if this goes on long enough, Airbus will be the winner of this aspect.

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