China Stops Boeing Deliveries as US Trade War Escalates

Aakhir Tak – In Shorts

• China has directed its airlines to halt orders for China Boeing deliveries.
• This move significantly escalates the ongoing US-China trade war.
• Beijing recently imposed a steep 125% retaliatory tariff on US products.
• Purchases of US aircraft machinery and equipment are also stopped.
• The decision hits Boeing hard in its crucial Boeing market, China.

Aakhir Tak – In Depth

China Halts Boeing Deliveries, Deepening US Trade War

China took a significant step on Tuesday amid escalating trade tensions. It directed its airlines not to order any China Boeing deliveries from the US aerospace giant. This directive follows Beijing’s imposition of a steep 125% retaliatory tariff on all US products over the weekend. This tariff was a response to US President Donald Trump‘s 145% levy on Chinese imports. These actions mark a serious escalation in the US-China trade war.

Broader Ban on Aircraft Equipment
According to a Bloomberg report, the directive goes beyond just finished aircraft. Beijing has ordered an immediate stop to any purchases related to aircraft machinery and equipment from US companies. This broadens the scope of the trade restrictions significantly. It signals China’s hardening stance in the dispute.

Potential Support for Domestic Airlines
The Bloomberg report further suggests a potential strategy from Beijing. The Chinese government might look to support domestic airlines. Specifically, those currently renting Boeing planes could receive aid. This aims to offset rising operational costs due to the high tariffs. Amid the US-China trade war, Boeing parts and aircraft will now cost Chinese buyers nearly double, the report stated. This price hike creates financial pressure on Chinese carriers.

Major Blow to Boeing
US aircraft giant Boeing finds itself caught in the crossfire. The US-China trade war between the world’s two largest economies shows no signs of easing. This conflict severely impacts Boeing’s largest international Boeing market – China. According to Bloomberg, China is projected to account for 20 percent of global aircraft demand over the next 20 years. Significantly, in 2018, China accounted for nearly 25% of Boeing’s aircraft deliveries. Halting China Boeing deliveries directly affects Boeing’s order book and future revenue projections.

Context and Recent Developments
This development occurred just two days after China’s Commerce Ministry made a specific demand. It urged the US to “completely abolish” the 145% duty imposed on Chinese imports. Meanwhile, the US position has shown some fluctuation. Last week, Donald Trump made a U-turn on some items. He exempted certain tech products from the ongoing tariff war. This provided significant relief to tech giants like Apple, which heavily relies on Chinese manufacturing. It also benefited US consumers. However, Trump’s constant shifts on tariff policy continue to create global economic uncertainty. The halt on China Boeing deliveries is the latest manifestation of this volatile environment.

Aakhir Tak – Key Takeaways to Remember

• China ordered its airlines to stop all China Boeing deliveries.
• This action escalates the US-China trade war following retaliatory tariffs.
• An immediate stop was also ordered for purchasing US aircraft machinery.
• The move significantly impacts Boeing’s critical Boeing market in China.
• China had recently urged the US to abolish tariffs on Chinese imports.

Aakhir Tak Editor-in-Chief

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