Beijing/Singapore: China slapped a 25% levy on US aircraft in a retaliatory move, placing Boeing Co. at a disadvantage against its key competitor Airbus SE in the best-selling single-aisle segment.
In a tit-for-tat response to tariffs by President Donald Trump, China announced the levy on planes weighing between 15,000 kilograms (33,070 pounds) and 45,000 kilograms, which would include some variants of its 737 family of passenger jets. Single-aisle jets, dominated by Boeing’s 737 and Airbus A320 series, are likely to account for 75% of the global market in 20 years, according to Boeing’s estimates.
China, poised to surpass the US as the world’s biggest market for planes by as early as 2022, is crucial for the Chicago-based planemaker. More than 50% of the commercial jetliners operating in China are Boeing airplanes, with more than a quarter of its global delivery last year to the Asian giant.
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Boeing fell as much as 5.1% to $314.10 in early New York trading ahead of the US market open. The shares, which closed Tuesday at $330.82, are up 12% this year. Boeing and Airbus declined to comment on China’s decision.
Shares of Airbus, based in Toulouse, France, rose 0.5% to €94.08 as of 11:22 am in Paris after China’s retaliation plan was made public. China will be adding 921 million passengers by 2036, fuelling demand for airplanes, according to the International Air Transport Association.
Last year, Boeing raised its 20-year forecast for aircraft demand in China as economic growth and an expanding middle class spur travel in the world’s most-populous nation. China will need 7,240 new planes valued at almost $1.1 trillion in the two decades through 2036, the planemaker said in September, raising it from an earlier forecast for 6,810 aircraft through 2035.
China also announced tariffs on other products such as soybeans and US-built cars. Bloomberg