Boeing Shares Slide as China Halts Jet Deliveries Amid Escalating Trade Tensions

Shares of Boeing fell on Tuesday following reports that China has halted all deliveries of the aerospace giant’s commercial jets to its domestic airlines, marking a significant escalation in the ongoing trade war between the world’s two largest economies. According to a Bloomberg report, Chinese authorities have instructed local carriers to suspend taking delivery of Boeing aircraft, triggering investor concern and a broader reevaluation of the company’s global prospects.

The move sent Boeing’s stock down by 1% by midday, dealing yet another blow to a company that has already faced years of financial strain. Neither Boeing, Chinese authorities, nor the White House offered an immediate comment, though former President Donald Trump claimed on social media that China had “reneged” on a major Boeing deal, stating they would “not take possession” of aircraft they had previously committed to purchase.

A New Front in the Trade War

The development underscores how deeply the trade conflict between the U.S. and China has permeated critical sectors of both economies. The United States has recently ramped up tariffs, with levies exceeding 145% on many Chinese goods. China has responded in kind, including a 125% tariff on American imports — a major barrier to purchasing big-ticket items like Boeing’s jets.

This latest move comes at a particularly precarious moment for Boeing. The company, which assembles all its commercial aircraft in the United States, relies heavily on international buyers — nearly two-thirds of its commercial planes are sold outside the U.S. As the nation’s largest exporter, Boeing contributes around $79 billion to the U.S. economy and supports approximately 1.6 million jobs directly and indirectly. The loss of access to China’s aviation market, the largest in the world, represents a serious financial risk.

A Long-Term Decline

While the halt in deliveries has been framed as a recent development, Boeing’s relationship with China has been deteriorating for years. The company has been largely shut out of the Chinese market since 2019 due to a combination of rising trade tensions and internal issues, including the high-profile grounding of its 737 Max jets following two fatal crashes in late 2018 and early 2019.

After the accidents, global aviation authorities grounded the aircraft, including those in China. While many countries cleared the plane to return to service by the end of 2020, China was slow to follow. As a result, Boeing’s ability to recover in the Chinese market has remained severely limited. Deliveries resumed only modestly in 2023.

Between 2017 and 2018, Boeing received orders for 122 jets from China. In the six years since it has booked just 28 orders — mainly for freighters or through leasing firms possibly acting on behalf of foreign carriers.

Deliveries Hold the Key

The timing of deliveries is critical for Boeing, as it receives the bulk of payment only when a plane is delivered. At the end of 2024, the company had 55 undelivered jets in inventory, many destined for China or India. With China now reportedly blocking deliveries, Boeing’s revenue stream could take another hit at a time when the company is already grappling with $51 billion in operating losses since 2018.

As the U.S.-China trade war enters a new phase, Boeing finds itself once again at the centre of geopolitical crossfire — a stark reminder of how economic policy and international diplomacy can reshape the trajectory of even the most iconic American companies.