China Says US Tariffs Severely Affect Its Airlines and Boeing

Chinese officials said on Tuesday that its airlines and Boeing have been hit hard by tariffs imposed by the US.

The Commerce Ministry in Beijing said it hopes Washington will listen to companies’ concerns and create a more stable trade environment.

The statement is Beijing’s first comment on the impact of tariffs on the aviation industry since US planemaker Boeing flew three 737 MAX planes that had been stationed in China for delivery to Chinese customers back to the United States.

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Boeing said last week a number of its customers in China had indicated they would not take delivery of new planes due to the tariffs, and it was looking to resell potentially dozens of aircraft.

China is willing to support normal business cooperation between the two countries, the ministry said in response to media questions about the returned planes and called on Washington to create a predictable environment for trade and investment.

“China’s affected airlines and Boeing have suffered greatly,” the ministry said, adding that US tariffs had disrupted global supply chains, air transport and investment activities.

Beijing has indicated it is concerned about the trade war’s fallout. Businesses have said China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need to be able to import without levies.

French aircraft engine maker Safran on Friday said it had been informed that China had granted tariff exemptions on some aerospace equipment parts, including engines and landing gear.

Other buyers ‘happy to take them’

Meanwhile, several other airlines – such as Air India, Malaysia Airlines and Riyadh Air – have said they are more than willing to take jets from Boeing if China does not want them.

Riyadh Air CEO Tony Douglas said on Monday the Saudi startup carrier would be ready to buy Boeing aircraft destined for Chinese airlines if they are not delivered due to the escalating trade war between the United States and China.

Boeing is looking to resell potentially dozens of planes locked out of China by tariffs after repatriating a third jet to the United States in a delivery standoff that drew new criticism of Beijing from US President Donald Trump.

“What we’ve done… is made it quite clear to Boeing, should that ever happen, and the keyword there is should, we’ll happily take them all,” Douglas said in an interview with Reuters on the sidelines of the Arabian Travel Market conference.

Boeing took the rare step of publicly flagging the potential aircraft sale during an analyst call last week, saying that there would be no shortage of buyers in a tight jet market.

Riyadh Air, backed by Saudi Arabia’s Public Investment Fund, has been ordering planes from both Boeing and Airbus ahead of its launch, including 60 narrow-body A321-family jets from Airbus in October and up to 72 Boeing 787 Dreamliners ordered in March 2023.

The airline does not expect delivery delays from either planemaker to be resolved any time soon.

Saudis entering the airline sector

Douglas said Riyadh Air had not seen any impact on demand for travel to and from the kingdom’s capital from global macroeconomic uncertainty, adding that the company plans to announce an order for wide-body jets this summer.

The airline, which is aiming to launch in the fourth quarter, has hired 500 employees and intends to increase its workforce to 1,000 over the next nine to 12 months, Douglas said. Thereafter, hiring of pilots and cabin crew will steadily continue as aircraft are delivered.

Saudi Arabia is seeking to acquire a slice of the global travel industry, including business travel, as the kingdom pours billions of dollars into developing giga-projects to diversify its economy away from hydrocarbons.

This includes the Dubai to Riyadh route, which is often used by bankers, lawyers, consultants and influencers. Douglas said the less than 2-hour flight represents one of the world’s most profitable routes in the world for an airline, from a revenue per kilometre standpoint.

The restart of flights from United Arab Emirates into Syria, and flying through the Syrian airspace is “probably a signal that things are at the margin moving in the right direction”, he added.