China is an important $BA (-0,79%)
an important customer for Boeing. In response to the trade war instigated by US President Trump, the People's Republic is making a decision that will set the already struggling company back even further.
The trade war with China instigated by US President Donald Trump is causing problems for domestic aircraft manufacturer Boeing. The financial portal Bloomberg reports, citing insiders, that the government in Beijing has called on Chinese airlines to stop accepting further deliveries of Boeing aircraft and not to buy any aircraft parts from US companies. The People's Republic is also considering aid for airlines that have leased Boeing aircraft and are now facing higher costs due to the trade conflict.
In pre-market trading, Boeing shares slumped by 2.6 percent at times in response. According to the insider, the order is a direct reaction to the introduction of Chinese retaliatory tariffs of 125 percent on American goods. These tariffs alone would have more than doubled the cost of aircraft and parts manufactured in the USA. This makes it impossible for Chinese airlines to buy Boeing aircraft. Trump had previously imposed special tariffs of up to 145 percent on Chinese goods.
Boeing delivered 44 aircraft worldwide in February. Although this was the same number as in January, it included fewer aircraft of the profitable 737 Max model than in the previous month. China was an important customer with eight deliveries.
According to the Aviation Flights Group, around 10 Boeing 737 Max aircraft are currently ready to join the fleets of Chinese airlines. The company is engaged in analyzing aviation data. Among them are two each for China Southern Airlines Co, Air China Ltd and Xiamen Airlines Co, reports "Bloomberg". Some of the planes are said to be parked near the Boeing plant in Seattle, while others are at a manufacturing center in Zhoushan in eastern China.
At the end of last year, Boeing CEO Kelly Ortberg warned that a trade war with China would hurt the company, as Boeing sells planes to Chinese airlines while the US does not import planes from that country. According to forecasts, China will account for 20 percent of global demand for aircraft over the next two decades.
