China Orders its Airlines to Stop Accepting US-Made Planes: Report

Boeing deliveries face turbulence as China escalates trade response.

Fri Apr 18 2025
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ISLAMABAD: China has instructed its airlines to stop taking deliveries of Boeing Co. aircraft, escalating trade tensions with the United States, Bloomberg reported, citing people familiar with the matter.

According to the report, Chinese authorities have also told domestic carriers to suspend purchases of aircraft-related equipment and components from American manufacturers. These directives come in response to US President Donald Trump’s recent tariff hike, raising duties on Chinese imports to as much as 145 per cent.

Beijing’s retaliatory tariffs

Bloomberg sources said the decision followed China’s imposition of retaliatory tariffs of 125 per cent on US goods over the weekend.

These tariffs significantly inflate the cost of American aircraft and parts, rendering further Boeing deliveries financially unfeasible for Chinese airlines.

To mitigate the impact, Beijing is reportedly considering support measures for airlines already leasing Boeing jets and now facing increased costs due to the tariff regime.

Impact on Boeing shares

News of the Chinese directive caused Boeing shares to fall by as much as 2.5 per cent on Tuesday, Bloomberg noted, with a 1.2 per cent drop recorded as of 11:13 am in New York.

This year alone, Boeing shares have declined by 10 per cent.

While tensions between the world’s two largest economies remain fluid, Boeing has been caught in the crossfire. President Trump criticised the move on his Truth Social platform, accusing China of reneging on a major Boeing deal signed during his first term.

Jets in limbo

About 10 Boeing 737 Max aircraft are currently awaiting delivery to Chinese carriers, including China Southern Airlines Co., Air China Ltd., and Xiamen Airlines Co., Bloomberg said, citing Aviation Flights Group data. Some of these planes are already located in Seattle and at a Boeing finishing centre in Zhoushan, eastern China.

Deliveries may still proceed on a case-by-case basis if paperwork and payments were finalised before China’s new tariffs took effect on April 12, the report said.

Requests for comment from Boeing, the Civil Aviation Administration of China, and the involved Chinese airlines went unanswered.

Delays and diplomacy

Bloomberg also reported that Juneyao Airlines Co. has delayed the delivery of a Boeing 787-9 Dreamliner previously scheduled for arrival in a few weeks.

Analysts view the move as a strategic lever in ongoing US-China trade negotiations. Jefferies analyst Sheila Kahyaoglu wrote in a research note that the suspension likely offers China bargaining power, while JPMorgan analyst Seth Seifman said the decision may not critically affect Boeing’s near-term production ramp-up due to strong global demand, especially from Indian airlines.

However, the long-term significance remains, as China is projected to account for 20 per cent of global aircraft demand over the next two decades. Although Boeing has not secured any major new Chinese orders in recent years, aircraft already in service will still require continued maintenance and eventual replacement, Bloomberg noted.

Despite efforts to localise and diversify, including reliance on Airbus and the domestically produced Comac C919, Chinese airlines still depend heavily on Boeing jets. Some carriers have stockpiled parts from original equipment Manufacturers (OEMs) and older aircraft to cushion any disruption.

Supply chain strains

Bloomberg Intelligence analysts George Ferguson and Melissa Balzano said the halt in Boeing deliveries was foreseeable amid the trade dispute and is likely manageable. However, if Boeing is unable to place those aircraft with other buyers, such as interested Indian carriers, it could hamper its efforts to reduce inventory and improve operational efficiency.

Tit-for-tat reactions

On April 11, China confirmed a 125 per cent tariff on all US goods starting April 12—adding to an earlier 20 per cent levy connected to fentanyl-related tensions—bringing the total rate to 145 per cent. Bloomberg emphasised that this development could further destabilise supply chains that were only beginning to recover post-pandemic.

In a swift retaliatory move, the US further raised tariffs on Chinese exports to 245 per cent. However, this time, China’s Ministry of Foreign Affairs said it would not pay any attention to President Donald Trump’s “tariff numbers game.”

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