China Halts Boeing Deliveries Amid Escalating Trade War

China has instructed its airlines to suspend taking further deliveries of Boeing Co. jets and cease all purchases of aircraft-related equipment and parts from US companies, Bloomberg reports, citing sources familiar with the matter.

This move is a direct response to escalating trade tensions, triggered by US President Donald Trump’s tariffs reaching as high as 145% on Chinese goods.

The directive, revealed by individuals who requested anonymity, follows China’s recent unveiling of retaliatory tariffs of 125% on American goods. These levies effectively double the cost of US-made aircraft and parts, making it economically unfeasible for Chinese airlines to accept deliveries. The Chinese government is also considering providing financial assistance to airlines leasing Boeing aircraft to mitigate the higher costs.

Shares of Boeing experienced a sharp decline, sliding as much as 4.6% in premarket trading following the report. Year-to-date, Boeing shares have already fallen by 10%, reflecting the growing impact of trade disputes and internal challenges.

The escalating trade conflict between the world’s two largest economies has placed Boeing in a precarious position. While the situation remains fluid and subject to change, it is worth noting that President Trump has previously backtracked on certain US levies, including those on Apple Inc. iPhones imported from China.

Data from Aviation Flights Group suggests that approximately 10 Boeing 737 Max aircraft are currently in the process of being prepared for entry into Chinese airline fleets, including China Southern Airlines Co., Air China Ltd., and Xiamen Airlines Co. Some of these aircraft are located near Boeing’s factory base in Seattle, while others are at a finishing center in Zhoushan, eastern China. Sources indicate that some aircraft with delivery paperwork and payment completed prior to the April 12 tariff implementation may be permitted entry into China on a case-by-case basis.

Neither the Civil Aviation Administration of China nor Boeing have provided official comments on the matter. Representatives from China Southern, Air China, and Xiamen Airlines have also not responded to requests for comment.

The move is a significant blow to Boeing, as China is projected to account for 20% of global aircraft demand over the next two decades. In 2018, nearly a quarter of Boeing’s output was destined for the Chinese market. However, trade tensions and internal issues, including the grounding of the 737 Max in 2019 and a recent quality crisis in 2024, have hindered Boeing’s ability to secure major orders from China in recent years. These factors have also contributed to Chinese airlines increasingly turning to European manufacturer Airbus SE.

The situation underscores China’s ongoing reliance on foreign suppliers for passenger aircraft. While Airbus is a key supplier, and Chinese airlines are also looking to the domestically produced Comac C919 to supplement their narrowbody needs, hundreds of Boeing aircraft remain in the fleets of Chinese airlines, requiring ongoing maintenance, repair, and replacements.

Boeing also has a considerable inventory of finished planes that were originally designated for Chinese airlines.