Boeing investors are supported to learn the full impact of Donald Trump’s trade war as US planer makers fear that they will be hit harder than would have been expected after US plain makers targeted at Chinese airlines returning to the US.
The Boeing 737 Max 8 plane returned to the US on Monday by a Chinese airline from Boeing’s China Finishing Center, according to flight data cited by Reuters. It arrived in the US on Sunday, the largest 737 painted on the colouring of China’s Xiamen Airlines, located in the Seattle plan maker’s US production hub.
Boeing’s stock fell nearly 3% on Monday, falling along with sales across Wall Street. The US stock market was hit by far higher volatility this month as investors tried to resolve the impact of Trump’s tariffs.
The aviation industry is caught up in a trade war. Trump’s tariffs on goods from almost all countries have caused chaos around the world, with US-China trade being the most affected, with repeated taxes of 145% and 125% on goods on US imports.
According to IBA, an aviation consultant, the new 737 Max has a market value of around $55 million (£41.4 million). This makes 125% tariffs exorbitant without significantly changing the airline’s business model.
Boeing Jet’s return highlights the vulnerability to tariffs for the largest US manufacturer and exporter. It was attempting to recover from blowing up door panels in the air in January 2024, which added to the Boeing issue, and the company replaced the CEO.
Kelly Ortberg, who took over Boeing after the safety crisis, will reveal the company’s first quarter financial results on Wednesday. Analysts expect sales to improve significantly compared to a year ago, with revenues rising 20% to $19.8 billion, while a loss of $466 million is expected for the quarter.
However, the outcome may be hidden by questions regarding the impact of tariffs on businesses.
Douglas Harned, an analyst at research firm Bernstein, does not expect a “definitive answer” to the tariff hit, but said he “is concerned that the risk is greater than expected” given the airline’s discomfort over tariffs and the possibility of delays in production attempting to avoid taxes.
Harned said the Chinese delivery suspension could hit the cash generation in 2025, but he added that he hopes the plane will eventually be delivered.
However, investors must contest great uncertainty about the White House’s intentions. Trump’s current policy is to raise tariffs in many countries after the 90-day “suspension” ends.
Richard Ablafia, consulting supervisor for Aviation, a consulting firm, said the Trump administration has shown how the aerospace industry works and “profound, hard-earned level of ignorance” that will damage Boeing.
Aboulafia added that while Boeing’s short-term hit to cash should be relatively limited, the company should push back hard against Trump’s tariffs, particularly to avoid a “devastating trade war with the world.”
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In the Chinese market, “it’s starting to become a problem in the long term,” Abrafia said. Chinese airlines are expected to explain in the same way as the fifth in the sale of new aircraft in one of the main markets for Boeing and its European rival Airbus. “We can’t leave that to Airbus,” Abrafia said.
Amid signs that the trade war could intensify beyond US-China relations, Beijing warned Monday that other countries negotiating with the US should take measures “decisively” if they trade at Chinese costs.
However, given China’s reliance on US and European planes, the rest of the world’s aviation industry may not be affected by measures.
Reuters reported that 737 Max 8 landed on Guam’s territory on Monday. After leaving Boeing’s Zhoushan completion centre near Shanghai, data from the flight tracking website AirNav Radar showed.
On Monday, a Xiamen Airlines spokesperson confirmed to Reuters that two carrier-marked planes went to the US but refused to provide a reason.
Boeing was approached for comment.
