China halts deliveries of Boeing jets as trade war with US escalates

In retaliation to US' 145% tariff, China has slapped a 125% per cent levy on US imports - effectively doubling the price of Boeing jets

China has directed its airlines to suspend further deliveries of Boeing aircraft, escalating the ongoing trade standoff with the US, Bloomberg reported on Tuesday, citing sources familiar with the matter.

 

The halt follows a series of back-and-forth tariff hikes between the two countries. Boeing, one of America’s top exporters, has been caught in the crossfire. The new levies significantly increase the cost of US-made planes, prompting Chinese authorities to freeze further deliveries and instruct carriers not to buy aircraft-related parts or equipment from American companies.

 

Earlier this month, US President Donald Trump imposed new tariffs on Chinese imports, citing the need to correct trade imbalances and penalise Beijing over its alleged role in fentanyl trafficking. With the latest round, the total effective tariff rate on some Chinese goods has now risen to 145 per cent. In retaliation, Beijing slapped a 125 per cent tariff on US imports, effectively doubling the cost of importing Boeing jets.

 

 

What happens to planes already scheduled for delivery?

Around 10 Boeing 737 Max jets were expected to be delivered soon to Chinese carriers such as China Southern, Air China, and Xiamen Airlines. Some of these jets are already in China or parked at Boeing facilities in the US, waiting to be handed over.

 

Deliveries may still proceed if paperwork and payments were finalised before the new tariffs took effect on April 12. However, any future transfers remain unclear.

 

How will this impact Boeing?

The freeze is a blow for Boeing, which sees China as one of its biggest markets. The country is projected to account for 20 per cent of global aircraft demand over the next two decades. But the American plane-maker has struggled to regain its footing in the country and has not announced any major order from Chinese carriers in years. This is due in part to persistent trade tensions and damage to Boeing’s reputation.

 

After being the first country to ground the 737 Max in 2019, China has increasingly leaned toward European rival Airbu and its own domestic jet maker, Comac. Still, Chinese airlines continue to operate hundreds of Boeing planes, many of which will require servicing and replacements over time.

 

Boeing, which still has a backlog of jets originally intended for China, now faces the dual challenge of managing inventory and navigating an increasingly hostile trade environment. The company has warned that a prolonged standoff could disrupt aviation supply chains that were only beginning to recover post-pandemic.

 

US-China trade war continues

The Trump administration has rolled back some levies, like those affecting Apple products, but the broader economic fallout remains uncertain.

 

Earlier, semiconductors and pharmaceuticals were exempted from Trump's reciprocal tariffs. However, the US President and his administration have been hinting that those sectors will soon face tariffs as well. Many countries have reached out to the US government seeking fresh trade agreements but nothing has been announced.

 

No official comment has been issued yet by Chinese aviation authorities, Boeing, or the affected airlines.