China Blocks Boeing, US Parts as Trade Tensions Escalate

China has ordered its airlines to suspend deliveries of all Boeing aircraft in response to the latest round of US tariffs on Chinese imports, which impose duties as high as 145%, according to multiple reports citing individuals familiar with the matter. The directive also extends to US-sourced aviation components, further escalating trade tensions between the world's two largest economies.

This decision disrupts Boeing’s long-standing commercial relationship with China, one of its key growth markets. Chinese carriers had been slated to receive a substantial number of Boeing aircraft between 2025 and 2027: 45 units for Air China, 53 for China Eastern Airlines, and 81 for China Southern Airlines. These deliveries are now frozen indefinitely.

The suspension follows Beijing’s recent tariff increase on US imports to 125%, a retaliatory measure after the United States expanded its trade restrictions. As part of its broader strategy, China has also officially halted purchases of US-made aircraft parts and components, which is expected to drive up maintenance and operating costs for Boeing planes already in service across the country.

According to Bloomberg, the Chinese government is evaluating support mechanisms for domestic airlines leasing Boeing jets that may face financial strain from the strained costs. At the time of reporting, neither Chinese authorities nor Boeing had issued official statements.

“China just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed-to aircraft,” remarked President Donald Trump.

Boeing’s commercial model relies heavily on international deliveries, with nearly two-thirds of its planes destined for foreign customers. China, the largest single market for aircraft, represents a critical component of Boeing's projections, with an estimated demand for 8,830 new planes over the next 20 years.

The suspension further exacerbates Boeing’s existing challenges. The company has faced cumulative operating losses of US$51 billion since 2018, the last year it reported an annual profit. In addition to trade tensions, Boeing continues to grapple with issues stemming from the 737 MAX crashes in 2018 and 2019, regulatory scrutiny, labor disputes, and supply chain disruptions. Chinese regulators were the first to ground the 737 MAX after the crashes, and deliveries of that model to China only recently resumed after a protracted pause.

Financially, delivery delays significantly impact Boeing’s cash flow, as the company receives full payment for aircraft only upon delivery. At the end of 2024, Boeing reported 55 planes in inventory awaiting delivery, most of which were intended for customers in China and India.

The suspension underscores a steep decline in Boeing’s business presence in China since 2019. Between 2017 and 2018, Boeing secured 122 plane orders from Chinese customers. In the six years since, only 28 orders have been placed, primarily for freighters or through leasing firms. No new orders from Chinese passenger airlines have been reported since the US-China trade dispute began.

“Tariffs that more than double the price would make [our aircraft] unaffordable to any Chinese customers even without new limits on deliveries,” stated an internal Boeing estimate.

Industry analysts warn that the ongoing tariff dispute could further stagnate bilateral trade, which reached US$650 billion in 2024.