Trade war woes: Boeing stock sinks after China reportedly blocks plane deliveries
The stock fell as much as 3% as Bloomberg reported China halted all purchases of US aircraft.
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Taylor Rains/Insider
- Boeing was under pressure Tuesday after China reportedly ordered airlines to stop US purchases.
- The company's shares dropped as much as 3% on the news.
- The reported move would be retaliatory 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, Bloomberg reported, ordered domestic airlines to stop purchasing aircraft products from the US. The report follows China's implementation of a 125% tariff on imports of American products, all part of an intensifying trade war between Beijing and Washington.
China is looking for ways to assist airlines that depend on leased Boeing jets, Bloomberg said, citing people familiar with the situation.
What it means: China's reported order would effectively block Boeing from one of the world's largest airline markets. Bloomberg said the country was 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 told Bloomberg that some of these paid-for jets could 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. The aircraft stock ended 2024 in the red, a tough year in which it faced lawsuits, mechanical failures, and a leadership shake-up.
