An editor-in-chief from China dropped a hint that commercial aircraft may be impacted shortly as China reacts to tariffs imposed by Donald Trump in the on-going trade dispute. As China is the largest potential market for the troubled 737 MAX, selling to the Chinese may be critical to Boeing’s future cash flows and competitive position.
Until now, China has been careful to play off Airbus and Boeing against each other, typically ordering equal number of planes from each. However, with tariffs on Chinese goods being imposed by President Trump, it is expected that China could retaliate with tariffs on US-built aircraft, which would likely cripple Boeing
sales in that country. While we do not expect China to be able to meet its internal growth targets without Boeing airplanes, a delay could send a chilling message to Washington.
Analysis
China is developing its own 737/A320 class airplane, the COMAC C919. While that aircraft remains a few years away from volume production, this airplane, when introduced, will be mandated for use by Chinese airlines for domestic routes, with each airplane sold coming at the expense of Airbus or Boeing.
An editor-in-chief from China dropped a hint that commercial aircraft may be impacted shortly as China reacts to tariffs imposed by Donald Trump in the on-going trade dispute.As China is the largest potential market for the troubled 737 MAX, selling to the Chinese may be critical to Boeing’s future cash flows and competitive position.
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