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China orders airlines to suspend Boeing jet deliveries over trade war, report says

Published: 16 Apr. 2025, 09:12

A Boeing 737 MAX aircraft is assembled at the company's plant in Renton, Washington, U.S., on June 25, 2024. [REUTERS/YONHAP]

China has ordered its airlines not to take further deliveries of Boeing jets in response to the U.S. decision to impose 145 percent tariffs on Chinese goods, Bloomberg News reported on Tuesday, citing people familiar with the matter.

Shares of Boeing, which considers China one of its biggest growth markets and where rival Airbus holds a dominant position, were down 0.5 percent in midday trading.

The global aerospace industry is being dragged into a U.S.-led trade war, with plane makers, airlines and suppliers reviewing contracts worth billions of dollars, after U.S. supplier Howmet Aerospace ignited debate over who should bear the cost of the tariffs.

Confusion over changing tariffs could leave aircraft deliveries in limbo, with some airline CEOs saying they would defer delivery of planes rather than pay duties.

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.

Beijing has also asked that Chinese carriers halt purchases of aircraft-related equipment and parts from U.S. companies, the Bloomberg report said.

Reuters has not been able to independently confirm the report.

Two aerospace industry sources told Reuters they had not been alerted independently to a blanket ban by China on U.S. aircraft parts.

Analysts said a short-term halt in deliveries to China would not have a major impact on Boeing, since the plane maker could redirect those jets to other airlines and because Airbus does not have capacity to supply the country alone.

China would have more difficulty banning imports of new U.S. parts to support its existing fleet of aircraft, including China’s C919. “If China stops buying aircraft components from the U.S., the C919 program is halted or dead,” wrote Bank of America analyst Ron Epstein in a note to clients.

The Chinese government is considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, Bloomberg News reported.

It was China that first grounded Boeing's 737 MAX jets after two fatal crashes in 2018 and 2019 killed nearly 350 people. China also suspended most orders and deliveries of the jet in 2019.

Boeing declined to comment.

The halt in deliveries to China marks yet another setback for the plane maker, which is navigating a slow recovery following a challenging year marked by a labor strike, enhanced regulatory scrutiny and persistent supply chain disruptions.

Beijing's action follows its decision last week to hike levies on U.S. imports to 125 percent in retaliation against U.S. tariffs, which would significantly raise the cost of Boeing jets bound for Chinese carriers and potentially lead airlines to consider alternatives such as Airbus and domestic player Comac.

Boeing's shares have shed more than a third of their value since a midair door panel blowout on a brand-new MAX 9 jet last year, which triggered a fresh wave of challenges for the company.

The escalating tit-for-tat tariffs between the world's two biggest economies risk bringing goods trade between the two countries to a standstill. That trade was valued at over $650 billion in 2024.

Reuters