China earlier this month ordered its airlines not to take any further deliveries of Boeing jets as part of the tit-for-tat trade war that’s seen Trump levy tariffs of as high as 145% on Chinese goods. The order came after China unveiled retaliatory tariffs of 125% on American goods, levies that would have more than doubled the cost of US-made aircraft and parts, making it impractical for Chinese airlines to accept Boeing planes.
Boeing Chief Executive Officer Kelly Ortberg confirmed last Wednesday that China has stopped taking deliveries of any planes and said the plane maker is prepared to find alternative buyers for China-bound aircraft.“We’re in close communication with our China customers and we’re actively assessing options for remarketing already built or in process airplanes,” Ortberg said during Boeing’s earnings call.
The move has left in doubt the fate of about 50 jets that were slated to go to China this year. Boeing has since begun flying 737 Max jets that were refused by Chinese airline customers back to the US.
Among airlines that are willing recipients of the aircraft rejected by China is Air India Ltd. Through the end of last month, the Indian airline had accepted 41 737 Max jets originally built for Chinese airlines, and the carrier has signaled it’s eager to take more, Bloomberg has reported.
An olive branch from Beijing would be a boon for Chinese airlines, many of whom had been relying on Boeing jets for their expansion plans. China is forecast to make up 20% of global aircraft demand over the next two decades and in 2018, nearly a quarter of Boeing’s output ended up there.
