A brand-new Boeing 737 Max jet was caught up in the ongoing trade war between the US and China. The plane, one of three jets that arrived at Boeing’s completion plant in Zhoushan, China since March, reportedly returned to the US shortly after arrival.
The Chinese government has instructed domestic airlines not to order new aircraft from Boeing and to seek approval before taking any already ordered planes. This move is part of a trade war that pits the world’s two largest economies against each other.
Boeing faces significant challenges due to tariffs imposed by both countries. The company risks soaring input costs in the US and prohibitively expensive planes for Chinese airlines, with retaliatory tariffs of 125% on US goods.
The situation has sparked concerns about Boeing’s supply chain, which relies heavily on international parts. CEO Kelly Ortberg warned that tariffs could drive up costs and disrupt the company’s complex supply chain.
Boeing is a key player in the global aviation market, representing a lucrative opportunity for the company. However, its stock has been affected by the trade war, falling 17% after Trump introduced his tariff policy.
The US government appears to be taking Boeing’s issues seriously, with President Trump commenting on the situation. The Chinese government, however, claims to be “not familiar” with reports of a stop to Boeing orders.
As one of the fastest-growing air travel markets in the world, China is crucial for Boeing. The company forecasted that over the next 20 years, China would account for 20% of the world’s air travel and double its fleet of commercial planes to around 9,600 jets.
Source: https://fortune.com/article/boeing-jet-returned-us-china-trade-war