As the trade war between the US and China continues, it has been alleged that China has instructed its airlines to not accept more aircraft deliveries from Boeing.

It is claimed that in response to the 145% tariff imposed by US President Donald Trump on Chinese products, China has retaliated. According to a report by Bloomberg, citing sources familiar with the matter, China has directed its airlines to refrain from accepting more aircraft deliveries from the aviation giant Boeing.

BOEING STOCKS DECLINE, RIVAL SEES RISE

Boeing, viewing China as one of its biggest markets, witnessed a 3% decline in its stocks following this news. On the other hand, stocks of Airbus, another key player dominating the Chinese market, increased by 1%. Boeing was founded in the US in 1916, while Airbus was established in France in 1970.

DELIVERY OF NEARLY 200 AIRCRAFT TO BE MADE WITHIN 2 YEARS

The three largest airlines in China, Air China, China Eastern Airlines, and China Southern Airlines, were planning to receive 45, 53, and 81 Boeing aircraft respectively between 2025-2027. According to Bloomberg, the Beijing government also requested companies to refrain from purchasing aircraft parts or equipment from US companies. It is expected that China’s decision to halt aircraft parts and equipment purchases will increase maintenance costs for aircraft in the country.

It has been alleged that the Chinese government is considering ways to support airlines that lease Boeing aircraft and are facing higher costs. After nearly 350 fatalities from crashes of Boeing’s 737 MAX aircraft in 2018 and 2019, China became the first country to ground these planes. In 2019, China also suspended orders and deliveries for the said aircraft.