Aerospace company Boeing said it was getting closer to finalizing a mega sales deal with China, which has ordered 500 jets. Anonymous sources with insider knowledge said the deal could go through, ending the company’s sales drought in China, or crumble if ongoing trade talks between the two countries fail.
The sources, who requested anonymity, disclosed that both sides were still ironing out the details of the complicated aircraft sale, including the volume and types of jet models and delivery schedules. Officials in China are already consulting with local airlines to determine their aircraft needs. The Boeing order could potentially end the long-running, contentious trade negotiations between the two nations. China has a similar deal with Airbus SE, but the details are yet to be publicized.
The Cryptopolitan reported in April that Chinese officials retaliated against U.S. tariffs by stopping all Boeing orders and deliveries. China sent a $55M jet back to Boeing due to tariff pressures, threatening future sales to the country. The uncertainty over tariffs reportedly threatens to stall Boeing’s recovery efforts and hurt its supply chain. A leadership void in Boeing China also complicates things for the aerospace company. Carol Shen was appointed interim president after Alvin Liu left the company a few weeks ago.
Boeing estimates that China will double its commercial fleet by 2045
The aerospace company estimated that the world’s second-largest aviation market could double its commercial fleet to 9755 jets over the next two decades. However, Boeing claimed that China’s airplane maker Comac could not cover the demand. China believes closing the deal will secure slots for aircraft deliveries, which are currently scarce since Boeing and Airbus are sold out into the 2030s. Sheila Kahyaoglu, an analyst at Jefferies, pointed out that Boeing had flexible deliveries to accommodate its most strategic customers.
The National Development and Reform Commission, China’s economic planning agency, recently sought input from domestic airlines about the number of airplanes they wanted. Meanwhile, talks centered on the single-aisle 737 Max were a sign that the country was gearing up for a large aircraft order. The last major order from China was in 2017, when Boeing committed to delivering 300 single- and twin-aisle aircraft worth over $37 billion.
“We certainly hope that there’s an opportunity for some additional orders in the next year with China.”
–Kelly Ortberg, the CEO of Boeing
However, Airbus has reportedly dominated airplane sales and deliveries to China since 2019, when two fatal accidents led the country’s regulators to ground the 737 Max. Boeing’s official website confirmed that the company has delivered only 30 orders to China since 2019. Ortberg believes long-running talks with China will eventually pay off.
Tariffs threaten to kill U.S. planemaker’s business
China’s recent near-total ban of rare earth mineral exports to the U.S. due to tariffs threatened to choke off Boeing’s business. A 737 Max meant for the Chinese Xiamen Airlines was also sent back to the aerospace company’s field in Seattle due to tariff-related issues. The aircraft was already awaiting completion at the Zhoushan center before it was flown back.
China reportedly claimed that any business between its airlines and Boeing was likely to be crippled by tariffs. The IBA noted that tariffs made buying new airplanes from the U.S difficult for Chinese airlines, given that the 737 Max’s price increased to $55 million after all duties were levied. Some Chinese airline CEOs also said they would rather stop new aircraft orders than pay exorbitant tariff rates.
The tariff wars and return of delivered airplanes reportedly came as Boeing recovered from dwindling business due to trade tensions between the U.S. and China. Trump’s global trade offensive resulted in the tit-for-tat bilateral tariffs that impacted Boeing’s airplane production and sales. The return of the 737 Max was reportedly a sign of disruption in the aerospace industry’s long-running duty-free status. Confusion over shifting tariffs left many airplane deliveries in limbo.
