Shares of Boeing fell on Tuesday after reports emerged that China has ordered its airlines to suspend all new aircraft deliveries from the US-based aerospace giant, marking a significant escalation in the ongoing trade war between Washington and Beijing.
According to a Bloomberg report, Chinese authorities instructed domestic airlines to stop accepting Boeing jets, dealing a fresh blow to the company, which is already reeling from years of operational and reputational challenges. Boeing’s shares dropped by 1% by midday following the news, although official confirmation from China, Boeing, or the White House had yet to be provided.
Former US President Donald Trump, however, acknowledged the development in a social media post, claiming China had “reneged on the big Boeing deal,” and would no longer take possession of aircraft previously committed to.
The move has broad economic implications. As America’s largest exporter, Boeing plays a critical role in the US economy, contributing an estimated $79 billion annually and supporting about 1.6 million jobs both directly and indirectly. The company employs nearly 150,000 workers across the United States. Given that nearly two-thirds of Boeing’s aircraft are sold to customers outside the country, international access is crucial to its survival.
Boeing has endured a rough stretch in recent years, accumulating $51 billion in operating losses since 2018—the last year it turned a profit. The company had already seen declining sales in China even before recent trade frictions. China, now the largest aircraft market globally, is expected to purchase around 8,830 new planes over the next 20 years, according to Boeing’s own projections.
However, Boeing’s footprint in China has significantly diminished. From 2017 to 2018, Chinese airlines ordered 122 aircraft. In the six years since, Boeing has received only 28 orders, primarily for freighter aircraft or from leasing companies. Notably, there hasn’t been a single confirmed order for a passenger jet from a Chinese airline during this period.
Trade tensions are only part of Boeing’s troubles. The 737 Max crisis—sparked by two fatal crashes between 2018 and 2019—led to a global grounding of the aircraft and severely damaged the company’s credibility. Although deliveries to China began to recover last year, the country was among the last to recertify the 737 Max for passenger use, contributing to the halt in shipments.
Tariffs have further complicated the picture. While the US has imposed duties of up to 145% on Chinese imports, Beijing has responded with tariffs of 125% on American goods—including Boeing jets, which cost tens of millions of dollars each. Such high levies render the aircraft prohibitively expensive, even without a formal delivery suspension.
The halt in deliveries is especially damaging to Boeing’s cash flow. The company constructs aircraft before receiving most of its payment upon delivery. With 55 planes currently in inventory—many of them earmarked for customers in China and India—Boeing faces mounting financial strain if those aircraft cannot be handed over soon.
The development is a stark reminder of how geopolitical tensions and corporate vulnerabilities can collide, with far-reaching consequences not only for one of America’s largest manufacturers but also for global supply chains and the broader economy.
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