Trade war woes: Boeing stock sinks after China blocks plane deliveries
The stock fell as much as 3% as China halted all purchases of US aircraft.
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Taylor Rains/Insider
- Boeing stock was under pressure on Tuesday after China ordered airlines to stop buying from the US.
- The company's shares dropped as much as 3% on the news.
- The announcement is a retaliatory move in the trade war between China and the US.
The move: Boeing slumped as much as 3% on Tuesday. The aerospace stock is now down 12% for the year.
Why: Shares are slipping after China reportedly ordered domestic airlines to stop purchasing aircraft products from the US. The move follows China's implementation of a 125% tariff on American products, all part of an intensifying trade war between Beijing and Washington.
Beijing is looking for ways to assist those airlines that depend on leased Boeing jets.
What it means: China's order effectively blocks Boeing from one of the world's largest airline markets. According to Bloomberg, the country is expected to account for 20% of global aircraft demand over the coming decades.
The effects are likely to be felt immediately. Boeing still has several completed planes meant for delivery to China. Those familiar with the matter indicated that some of these paid-for jets will be allowed into China on a case-by-case basis.
The development might end up as welcome news for Airbus. The European competitor has slowly overtaken Beijing in Chinese fleets, a role that could deepen. The firm's American depository receipts are down roughly 2% for the year.
For Boeing, China's decision adds to a list of difficulties faced by the company. The aircraft stock ended 2024 in the red, a tough year in which it faced lawsuits, mechanical failures, and a leadership shakeup.
