A Boeing jet at Boeing’s completion plant in Zhoushan was returned to the US on Friday, according to reports. Because of the ongoing trade war, the jet was not handed over to Xiamen Airlines.
Earlier this week, the Chinese government instructed Chinese airlines not to buy new jets from Boeing. It also required Chinese airlines to get permission before accepting new jets that it already ordered but had not been delivered yet.
Trade War
China and the U.S. are locked in a trade war, leaving companies like Boeing caught in the middle. This jet was one of the three 737 Max jets, according to Reuters. The 737 Max landed at Seattle’s Boeing Field at 6:11 PM, painted with Xiamen livery.
This month, President Donald Trump raised the baseline tariffs on Chinese imports to 145%. This signaled the start of an ongoing trade war between the US and China. As a response, China imposed a 125% tariff on US products.
Tariffs Could Cripple an Airline?
According to aviation consultancy IBA, these policies could cripple the Chinese airline. With each 737 Max valued at $55 million, the disruption could pose significant financial challenges. Right now, it is not clear which party is responsible for the 737 Max’s return to the US.
A spokesperson for China’s Ministry of Foreign Affairs told reporters they were “not familiar” with reports of a halt to Boeing orders. The trade war between the US and China could mean serious disruption in the aviation industry as aircraft deliveries enjoyed duty-free status for decades.
Boeing now faces a new hurdle, especially after an almost five-year import freeze on its 737 Max jets. According to analysts, confusion over tariffs could leave jet deliveries in limbo. Some airline CEOs are even saying that they’d rather defer the delivery of planes than incur paying duties.
In March, a month before Trump’s administration announced its sweeping tariff policy, Boeing CEO Kelly Ortberg addressed employees and warned that the proposed tariffs could drive the cost of aircraft and disrupt the company’s supply chain.
