The trade war between the United States and China has reached a new level: Beijing has just refused the delivery of Boeing aircraft, in response to the increase in American customs duties. A new standoff, which jeopardizes the order book of the largest American aircraft exporter.
An unprecedented blockage in the history of Boeing
China's decision to suspend the reception of Boeing aircraft comes after Washington's decision to impose customs duties of up to 145% on Chinese imports. This measure, initiated by President Trump, aimed to put pressure on Beijing, as part of an already tense trade standoff. In retaliation, China raised its own customs duties on American products to 125%, and announced further sanctions in the event of prosecution. A promise made, a promise kept.
Boeing CEO Kelly Ortberg confirmed that three planes ready for delivery to Chinese companies had been rejected by Beijing. Two have already been repatriated to the United States, the third still in transit. Boeing, which planned to deliver around fifty aircraft to China this year, will have to find other buyers. A hard blow for the company, for which China represents around 10% of the order book for commercial aircraft, with a prospect of growth over the next two decades.
What consequences?
The Chinese decision already has tangible consequences. Boeing, which supports nearly 1.8 million jobs in the United States and contributes $84 billion to the national economy, finds itself in a delicate situation. The delivery freeze is depriving the company of a significant portion of its revenue. Faced with this impasse, Boeing is considering redirecting the planes already produced to other airlines. But the saturation of Airbus's order book and the dependence of the Chinese manufacturer Comac on... towards American suppliers limit alternatives.
Besides the direct economic impact of the situation, the Chinese decision could mark a further step towards the trade war between the two countries. Donald Trump recently announced a desire to lower customs duties on certain products, but China seems ready to maintain its position, and threatens to counterattack on other strategic sectors, such as rare earths, essential to the American technology industry. For Boeing, as for the entire American aeronautics sector, the outcome of this trade conflict promises to be decisive.
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