China halts Boeing jet deliveries in retaliation against 145% US tariffs: Report

US vs China Trade War: In a significant escalation of the ongoing trade war between China and the United States, Beijing has directed its airlines to cease taking deliveries of Boeing aircraft in response to the US imposing steep tariffs of up to 145% on Chinese goods.

Beijing has also asked that Chinese carriers halt purchases of aircraft-related equipment and parts from US companies, Bloomberg reported.

Beijing has reacted furiously to what it calls unlawful "bullying" by Washington and dismissed further hikes as pointless.

Boeing Shares Drop as China Freezes Orders

This move, reported by Bloomberg, highlights the intensifying strain in bilateral relations and delivers a substantial blow to Boeing, which relies heavily on China as a key market.

Boeing's shares - which look at China as one of its biggest growth markets and where rival Airbus holds a dominant position - were down 3 per cent in premarket trading.

Juneyao Airlines Postpones Boeing 787-9 Dreamliner Delivery

Juneyao Airlines, a Shanghai-based carrier, was scheduled to receive a Boeing 787-9 Dreamliner valued at approximately $120 million within three weeks but has postponed the delivery due to the tariff dispute.

The airline had planned to use the aircraft for expanding its long-haul routes to European destinations such as Brussels and Athens this summer, but the delay now jeopardises these plans.

China’s Move Likely to Raise Maintenance Costs

China’s decision to halt purchases of aircraft-related components from US suppliers is expected to significantly increase maintenance costs for jets operating within the country.

A halt on further purchase of Boeing jets by China will likely complicate upkeep and repairs, forcing airlines to seek alternative sources or face higher expenses.

Additionally, the disruption may impact the operational efficiency and safety standards of the affected aircraft fleets.

The US and China have been embroiled in a tariff war triggered by US President Donald Trump's trade policies. Last week, China hiked levies on US imports by 125 per cent in retaliation against US tariffs.

China Mulls Assistance to Airlines

The Chinese government is considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, Bloomberg News reported.

A 125 per cent tariff would substantially increase the cost of Boeing aircraft destined for Chinese carriers, rendering them financially burdensome and likely prompting airlines to explore alternatives such as Airbus and the domestic manufacturer COMAC.

China's top three airlines - Air China, China Eastern Airlines, and China Southern Airlines - have plans to take delivery of 45, 53 and 81 Boeing planes, respectively, between 2025-2027, reported Reuters.

US-China Trade War Intensifies: Goods Trade at Risk of Standstill

According to analysts, the escalating reciprocal tariffs between the world’s two largest economies - United States and China- threaten to bring goods trade to a complete halt. In 2024, this trade was valued at over $650 billion.

Trump Signals Possible Deal Amid Mounting Economic Tensions

Donald Trump, who said on Friday that he was comfortable with the tariffs on China, also suggested that a deal with Beijing could be on the horizon, but no agreement has been reached yet.

(With inputs from Reuters)