China has instructed Chinese carriers to refuse delivery of Boeing jets and directed existing customers to stop purchasing aircraft-related equipment and parts from US companies, another sign of the escalating trade war between the USA and China that directly impacts aviation and global travel.
China Tells Chinese Carriers To Stop Boeing Deliveries
In the last month, we’ve seen the US impose duties of up to 145% on imports from China with China responding by imposing duties of up to 125%. Fierce barbs have been exchanged by both sides, with the US declaring that China has been taking advantage of the US for too long and China declaring that the US is bullying it.
Now aerospace giant Boeing finds itself caught in the fray, with reports emerging that China has instructed Chinese carriers to:
- refuse delivery of Boeing aircraft
- stop purchasing aircraft parts and equipment from US suppliers
Beijing is reportedly also looking into providing assistance to airlines that are leasing Boeing jets and now facing higher costs.
In the coming days, 10 Boeing 737 Max were slated for delivery in China, including for Air China, China Southern Airlines, and Xiamen Airlines. The status of those orders appears in jeopardy.
To be clear, this news is based on a Bloomberg report: neither the Civil Aviation Administration of China or Boeing has officially confirmed whether this policy is in effect.
Who Will Blink First?
I always imagined the final deterioration in relations between China and the USA would come when China invaded Taiwan. There’s no doubt that China has intently studied the response of Western powers to Russia’s invasion of Ukraine in order to best gauge how it can attack Tawaian, a nation China claims for itself.
The rapid deterioration in relations between Washington and Beijing over trade likely accelerates that timeline, though I still maintain some hope that both sides can avoid a further escalation that only weakens all parties.
President Trump already blinked by amending the blanket tariffs to exclude smartphones, computers, and other consumer electronics, even as he since promised a fresh look at duties on these devices.
In 1922, British philosopher Bertrand Russell published The Problem of China, writing:
“The Chinese nation is the most patient in the world; it thinks of centuries as other nations think of decades. It is essentially indestructible and can afford to wait.”
The US thinks China depends on it for economic booming prosperity: to feed its population and grow the middle class. Who will prevail? Will trade with the rest of the world insulate China from its US trade war?
It’s too early to tell, but we certainly see who will lose, and that is Boeing.
But in one sense, Boeing has already lost. In 2018, about 25% of Boeing’s new aircraft deliveries went to China. But as relations between Washington and Beijing deteriorated during Trump’s first term, carriers began to shift more business to Airbus. Indeed, Boeing has not announced a major Chinese order in many years. This was only exacerbated after the Boeing 737 MAX debacle, with China among the first nations to ban that jet type from delivery.
CONCLUSION
Reports out of China suggest the Chinese government has banned imports of Boeing jets and also instructed existing Boeing customers to stop by replacement parts from US supply sources. This merely continues a trend of China away from Boeing that began in 2019.
China cannot ramp up Comac C919, built on stolen Western technology, or other domestic aircraft production overnight, making Airbus the biggest beneficiary of this news.
image: Boeing
I’m sure those 10 Max’s won’t be unsold for long.
Hopefully this is another erosion of the Chinese economy and hastens the weakening of the current, expansionist ChiCom regime.
Why should the West blatantly fund its own demise?
China plays the long game. The economic scars from the pandemic were a self-inflicted wound in my mind and did slow the Chinese trajectory to surpass the USA…and I don’t put it past the Xi regime to have deliberately introduced COVID-19 into the population. The question here is who can outlast who…and it seems to me that if the US is going to beat China in this trade war, it better quickly cut trade deals with the rest of the world to lower those barriers to near-zero.
“…and I don’t put it past the Xi regime to have deliberately introduced COVID-19 into the population.”
Dang. While sometimes I diverge from the conclusions of your analysis, it is in fact your analysis that I appreciate. I don’t think of you as susceptible to this kind of stuff.
I’m not anti-China. I think there is room for mutual economic advantage and shared growth. But the pandemic…I wouldn’t put anything past China.
Tbf wouldn’t put it last the Chinese to do that, but then they’re only following in the footsteps of the American govt which purposely infected it’s own citizens with syphilis IIRC
Maybe Boeing can get caught up domestically now. Bastain said he doesn’t want any Airbuses with Tarrifs and his order book has no Boeing’s. Oops. I guess Bastain should just focus on dropping some ecstasy with the Co-eds at Coachella. He seems more interested in that anyway.
Gee, it’d sure be a shame if Tesla’s Gigafactory in Shanghai suddenly lost their business license.
Which would be a striking warning to anyone or any company investing in China going forward.
Let’s be real here. Nobody is going to be investing in either China or the US for quite a while, so might as well make things interesting.
It was Boeing’s own problems producing and delivering the MAX that have resulted in China having far fewer MAXs than they should have by this point in time. And it is also the production backlogs that mean that Boeing can easily redirect its Boeing aircraft to other customers including when the MAX 7 and 10 get approved.
Trade wars do hurt but China’s economy cannot replace US demand on the trillions of dollars of cheap consumer goods that have become the staple of American life including the lifeblood of Amazon and Temu (and UPS that delivers Temu products)
Matthew is right that the trade war could push Beijing to act on Taiwan. Given that Europe is being told to fend for itself, it could be the US, Japan and S. Korea that have to defend Taiwan.
and it is noteworthy that Japan, S. Korea and Taiwan have come early to the table with the US.
as for aviation, remember that Boeing will be hurt 6X more than Airbus in a US-European civil aviation trade war
Stupid trade wars aside…
From a passenger experience, The airbus planes imho are better than their Boeing counterparts. A220, A330, A321, A350, A380 are all wonderful planes to fly on.
Absolutely and it’s imperative that the US make trade deals with other Asian nations (Good Morning, Vietnam!).
The Evergrande bankruptcy showed significant weakness in the Chinese economy so if the US were going to start a trade war then now is the time.
Remember when everyone thought that giving Hong Kong back to the Chinese would hasten democracy on the mainland?
That was the epitome of the long game and the Democracy lost.
China is learning how to survive economically when it invades Taiwan. This is a trial run though the EU would act, when it’s not currently.
Derek is correct. The invasion of Taiwan is coming soon China does play the long game and is retrenching for the upcoming war. Xi wants to go down in history as the man who brought the wayward Chinese home. Even if it is to enslave them
“There’s no doubt that China has intently studied the response of Western powers to Russia’s invasion of Ukraine in order to best gauge how it can attack Tawaian, a nation China claims for itself.”
=》And what about the US intentions to officially invade or own Greenland? A wonderful signal for a “rule of Law democratic” nation that China perfectly understands.
It’s even worse…like this Ramirez cartoon:
And Trump blaming Zelinsky for starting the war in the Oval Office yesterday with Bukele…wow.
Boeing’s 737 max backlog is 8 to 10 years. If China ordered local airlines not to accept Boeing planes, it will barely affect Boeing (at least for the short term). Other airlines will celebrate as the wait time for new planes will be shorter.
Ryanair and Allegiant will happily take these airframes.
Ryanair just said it will not take Boeing aircraft with tariffs on them.
as hard as it is for some to accept, Boeing will be more harmed in a civil aviation tariff war than Airbus will
Tim is correct.
I do think that the Trump admintration will shortly be giving Boeing a repreive in some form…
I think Matthew is correct….help is coming.
Because he can’t get parts for his 747 and 757.
And he forgot Taylor didn’t made his clubs in America either.
“ The US thinks China depends on it for economic booming prosperity”
I disagree. Trump thinks that but there are smart people in this country too who know better, they’re just unwelcome in D.C. during this administration.
Boeing has already lost its dominance in the aerospace market. Airbus overtook it in sales long ago and now SpaceX has to send its capsules to rescue astronauts stranded by Boeing on the ISS. Trump will put Boeing into bankruptcy. How do you spin this as a win?
Great news for Airbus and the skies over China will be much safer without the 7M8 polluting them.
China has been stealing our intellectual property and dumping goods on us for decades. I don’t applaud the way Trump is conducting his trade wars at all but anyone who wants to defend China’s actions in this respect must hate our own country, Taiwan, Japan and others. China has taken over the South China Sea far beyond their borders and has threatened Korea, the Philippines, Malaysia and Vietnam.
It’s long past time we stood up to them. Or we could act like a President who’d dead before he even left the office.
* Who’d dead* before he left the office? You must be shaken . Go back to your now published threats of doxxing me. No response?
You don’t belong in this community.
Figurehead Trump has blinked once and will have to blink again. The rare earths that china has are needed by the US military complex. No rare earths, less wonder weapons.
China will also refuse US required spare parts and technical support from Boeing? This may not be a good thing for the existing Boeing aircraft in China.
This trade war will help establish Comac as aircraft provider.
LOL of course China is going to win the long con. Is there even any doubt?