China softens stance toward US firms after Boeing dispute
What's the story
China's Ministry of Commerce has said it is open to regular cooperation between American businesses, after Chinese airlines recently decided to stop accepting new aircraft from US manufacturer Boeing. The move comes after US President Donald Trump's tariff hikes upended the global air transport market, hurting Chinese airlines and Boeing alike. The ministry's statement highlights China's wish for a stable, predictable environment for trade and investment activities.
Tariff escalation
Trade tensions and impact on Boeing
Earlier this month, China ordered its airlines to halt further deliveries of Boeing jets, as part of an ongoing trade dispute. The dispute has seen Trump impose tariffs up to 145% on Chinese goods, prompting China to respond with retaliatory tariffs of 125% on American products. These levies would more than double the cost of US-made aircraft and parts, rendering it impractical for Chinese airlines to accept Boeing planes.
Alternative strategies
Boeing's response and future plans
Boeing CEO Kelly Ortberg had confirmed last week that China has stopped accepting any planes. He said the company is ready to seek alternative buyers for aircraft meant for China. "We're in close communication with our China customers and we're actively assessing options for remarketing already built or in process airplanes," Ortberg said during Boeing's earnings call. This uncertainty now looms over about 50 jets scheduled for delivery to China this year.
Alternative arrangements
Air India steps in amid Boeing's delivery halt
In light of the stalled deliveries, Boeing has begun sending 737 Max jets, originally slated for Chinese airline customers, back to the US. However, Air India is open to accepting the planes. By the end of last month, Air India had accepted 41 737 Max jets originally manufactured for Chinese airlines and is eager to take more, as per Bloomberg.