Trade war escalates: China rejects American aircraft, Bloomberg says
Photo: China has decided to halt purchases of Boeing aircraft (Getty Images)
China has ordered its airlines to halt deliveries of new Boeing aircraft amid the escalating trade war between Beijing and Washington, Bloomberg reports.
The decision to halt purchases of American Boeings was made after US President Donald Trump imposed tariffs of up to 145% on Chinese goods, Bloomberg reported, citing sources familiar with the matter.
In addition, China has urged its airlines to stop purchasing aviation equipment and spare parts from US companies.
This move came after Beijing announced "mirror" tariffs of 125% on American goods. Effectively, this doubles the cost of Boeing aircraft and parts, making their procurement economically unfeasible for Chinese carriers.
The Chinese government is also considering options to support airlines that lease Boeing aircraft and are suffering losses due to rising costs.
Market reaction
Following the Bloomberg report, Boeing shares fell by 2.5% on Tuesday, and as of 11:13 a.m. New York time, they were down 1.2%. Overall, the company's stock has dropped by 10% this year.
Trump, in his social media platform Truth Social, stated that China "just reneged on the big Boeing deal" that had been reached during his first term.
Fate of the aircraft
The outlet adds that around 10 Boeing 737 Max aircraft are currently being prepared for inclusion in the fleets of Chinese airlines, including China Southern Airlines, Air China, and Xiamen Airlines. Some of these planes are already near the factory in Seattle or at a completion center in Zhoushan, eastern China.
Some of the aircraft may still be delivered to China on an individual basis if paperwork and payment were completed before the new Chinese tariffs came into effect on April 12.
Boeing and the Chinese airlines declined to comment.
US–China trade war
US President Donald Trump launched a trade war against China on April 2 by imposing tariffs of 54% on all Chinese goods.
China responded to the US actions on April 9 by introducing tariffs of 84% on American products.
That same day, Trump announced a 90-day tariff pause for the country’s largest trade partners. However, he then raised tariffs on Chinese imports to 145%, further escalating the confrontation between the world’s two largest economies.
On April 11, it was reported that China increased tariffs on all US goods from 84% to 125%. The changes took effect on April 12.
Earlier, China vowed to "fight to the end" in the tariff war with Trump, calling the US tariffs blackmail.
