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The Chinese government has reportedly instructed domestic airlines to halt purchases of Boeing aircraft and related parts, signaling a sharp escalation in trade tensions with the United States. The move is seen as a retaliatory response to the Biden administration’s 145% tariffs on Chinese imports. According to Bloomberg, Boeing’s shares fell as much as 4.6% in pre-market trading following the news.

China began imposing 125% retaliatory tariffs on U.S. goods starting April 12, effectively doubling the cost of American aircraft and parts, and making procurement infeasible for Chinese carriers. Beijing has halted all new orders of Boeing’s 737 MAX, and is reportedly considering financial support for airlines relying on leased aircraft. While some planes have completed final approvals and could technically be delivered, around 10 aircraft bound for Chinese carriers now face delivery uncertainty.

This development poses a serious blow to Boeing, given that China is projected to account for 20% of global aircraft demand over the next two decades. In 2018, roughly 25% of Boeing’s output was delivered to China. However, following the 737 MAX groundings in 2019 and rising U.S.-China tensions, Boeing has lost ground to Airbus. The current policy may further disrupt the company’s post-pandemic recovery and global supply chain momentum.

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