China’s return of planes comes as trade war with US deepens 

Chinese airlines have returned 50 planes to Boeing, leaving the manufacturer scrambling to find new buyers for the aircraft, as trade tensions with the US show no signs of deescalating. 

The jets were returned following the Chinese Government’s notice to all Chinese airlines to not accept delivery of all Boeing aircraft, one of the many retaliatory responses from Beijing, following the 145% tariff imposed on all Chinese goods entering the US. Shortly after the new US tariff levy, China levied their own levy, a hefty 125% tariff on all US imports into China. 

Production had started on 41 aircraft originally destined for China, with another nine planned for delivery this year, the Guardian reported.  

Kelly Ortberg, Boeing’s Chief Executive, in a call with investors, confirmed that their customers in China were not taking delivery of these aircraft. Boeing is now considering new buyers, and if required is willing to repaint the planes with different airlines’ colours. Overall, Boeing has 5,600 planes on order. 

Yet, as many outlets are reporting, with Boeing effectively shutout from the world’s fastest growing market, then Airbus, with facilities in France, China and US will be uniquely positioned to reap the rewards. 

“We are not going to continue to build aeroplanes for customers who will not take them”, Ortberg said, in comments, reported by the Guardian.  

He then further added that, “if we see markets closing that’s going to be a big challenge for us”. 

This will not be good news for Boeing and for the US, as Boeing is the US’s largest goods exporter, with the company recording a trade flow of $19 billion last year, according to our ALPS Marine analysis.