China orders its airlines to stop accepting deliveries of Boeing jets, report says

In the midst of an escalating trade war between the United States and China, the Chinese government has instructed domestic airlines to halt the acceptance of Boeing jets, as reported by Bloomberg News. This directive also includes stopping the purchase of airline parts and components from U.S. companies, according to sources familiar with the situation.

The move by China to cease accepting Boeing jets comes after the country increased retaliatory tariffs on U.S. goods to 125%, matching the level of tariffs imposed by President Trump on Chinese imports. These tariffs could potentially reach as high as 145% for certain products. The elevated tariffs by China would have effectively doubled the price of U.S.-made aircraft and parts, rendering them financially unfeasible for Chinese carriers.

Boeing, a major player in the aviation industry, is set to deliver approximately 10 737 Max aircraft to Chinese airlines such as China Southern Airlines, Air China, and Xiamen Airlines. The company disclosed that it delivered a total of 130 aircraft during the first quarter, with over 100 being 737 jets. The impact of the trade war on these deliveries remains uncertain, as some of the paperwork and payments for the ordered jets may have been finalized before the recent escalation of the trade conflict.

Despite the challenges posed by the trade tensions between the two economic powerhouses, the aviation industry continues to navigate through uncertain waters. Boeing’s shares experienced a 3% decline in pre-market trading following the news of China’s directive to halt Boeing jet acceptance.

As the trade war persists and evolves, both countries are grappling with the implications on various industries, including aviation. The intricate interplay between economic policies and trade relations underscores the complexity of international commerce in a globalized world.

This article was written by Aimee Picchi, the associate managing editor for CBS MoneyWatch, with a background in covering business and personal finance. Her experience in financial journalism includes previous roles at Bloomberg News and contributions to prominent national news outlets like USA Today and Consumer Reports.