Boeing can now deliver its planes to Chinese airlines again
What's the story
China has lifted its month-long ban on airlines accepting deliveries of Boeing aircraft. The decision comes after a major breakthrough in trade negotiations with the US, which temporarily reduced tariffs on both sides. The Chinese government has now informed domestic carriers and agencies that they can resume accepting US-made aircraft deliveries, allowing them to organize their own delivery schedules and terms.
Impact
A boost for Boeing
The resumption of Boeing deliveries to China is likely to give the company an immediate boost. The development comes as the US and China have agreed on a tariff truce, with the US slashing its 145% levies on most Chinese imports to 30% for 90 days. In return, China agreed to cut its duties on US goods from 125% down to 10% and remove other countermeasures imposed against the US since April 2.
Trade dispute
Boeing caught in US-China trade dispute
Boeing was caught in the crossfire of the US-China trade dispute after President Donald Trump's tariffs on major trading partners were reciprocated by China with retaliatory duties. This resulted in a price hike for Boeing jets in the Chinese market, and even led Beijing to stop its airlines from accepting deliveries of Boeing aircraft.
Cooperation
China's willingness to cooperate with US companies
Signs of a possible relaxation had emerged in late April, when China had expressed its willingness to support normal cooperation with US firms. Beijing had offered to suspend higher duties on certain US imports, including medical equipment, some industrial chemicals, and plane leases. However, it remains unclear how soon China's carriers will be able to receive the planes they need despite the lifting of the ban.
Company response
Boeing's response to the lifting of the ban
Boeing declined to comment on the lifting of the ban and there was no immediate response from China's Civil Aviation Administration. Some jets had been returned to the US after being rejected by Chinese customers. Meanwhile, Boeing has prepared alternative buyers for China-bound aircraft yet to be delivered. The prospect of newly available 737 MAX jets has sparked interest from airlines in India, Malaysia, and Saudi Arabia.