Shares of Boeing fell Tuesday following a report that China has halted the delivery of all its jets to airlines in the country as part of an escalating trade war that has enveloped the world’s two biggest economies.
Boeing (BA), a component of the Dow Jones Industrial Average, fell in early trading after a Bloomberg report that Chinese authorities had ordered its airlines not to take any further Boeing deliveries. Shares were down 1% by midday.
Neither Chinese authorities, Boeing nor the White House immediately responded to CNN requests for comment on the report, although President Donald Trump said in a social media post Tuesday that China “just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft.”
The move would be a blow not just to Boeing, America’s largest exporter, but also to the US economy, the world’s largest. As Trump has levied tariffs on trading partners – including at least 145% on many Chinese products – other nations have retaliated as well, in some cases sparking a tit-for-tat that now threatens to hurt companies, manufacturing and jobs around the world.
Trump’s acrimony toward China has been particularly acute, with a spiraling trade war with that nation threatening everything from American farmers to iPhone shipments – even as confusion has mounted over exemptions and delays.
Boeing is particularly vulnerable to the current trade disputes between America and its trading partners. Unlike many multinational companies, Boeing builds all of its planes at US factories before sending nearly two-thirds of its commercial planes to customers outside the United States. And Boeing is a major part of the US economy, contributing an estimated $79 billion and supporting 1.6 million jobs both directly and indirectly. It has nearly 150,000 US employees of its own.
Boeing has been struggling for six years, racking up $51 billion in operating losses since 2018, the last year it reported an annual profit. China is the world’s largest market for aircraft purchases, with Boeing’s own recent analysis estimating that Chinese airlines are expected to purchase 8,830 new planes over the next 20 years.
Boeing was already dealing with a drop in sales for years in China, even before the introduction of tariffs. China has put tariffs of 125% on all imports from the United States. Boeing’s jets cost tens of millions of dollars each, so tariffs that more than double the price would make them unaffordable to any Chinese customers even without any new limits on deliveries.
Boeing has largely been shut out of the Chinese market since 2019. Part of that was due to the the trade tensions between China and the United States that started during the first Trump administration. Boeing took orders for 122 planes from Chinese customers in 2017 and 2018. In the six years since then, Boeing has only received orders for 28 planes, and that was mostly for freighters or from Chinese leasing companies, which could be buying them on behalf of airlines outside China. It has not reported a single order for a passenger jet from a Chinese airline.
But the drop off wasn’t all due to trade tensions. Some was due to problems at Boeing itself, including the grounding of its best-selling 737 Max following two fatal crashes in late 2018 and early 2019. Deliveries to China came to a near halt after the second crash. That’s because aviation authorities around the world grounded jets in the wake of the disasters and China did not immediately allow for them to return to service even when countries cleared the plane to carry passengers in late 2020. Deliveries only started to rebound last year.
Deliveries are crucial to Boeing, since that’s when it gets paid. The company builds the plane first and gets most of its payment after delivering the finished product. Choking off these deliveries is a particularly big blow for Boeing, which had a total of 55 planes in inventory at the end of 2024 that it has not been able to deliver to customers, primarily those in China and India, according to the company.
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