Boeing shares fall on report that China has halted its deliveries as part of trade war

By Chris Isidore, CNN

(CNN) — Shares of Boeing fell Tuesday following a report that China has halted the delivery of all its jets to airlines in the country as part of the escalating trade war.

Boeing (BA), a component of the Dow Jones Industrial Average, fell 2% in early trading after dropping more sharply in premarket following a Bloomberg report that Chinese authorities had ordered its airlines not to take any further Boeing deliveries.

Neither Chinese authorities, Boeing nor the White House immediately responded to CNN requests for comment on the report.

The move would be another blow to the struggling aircraft maker, which has not reported an annual profit since 2018 and has tallied $51 billion in operating losses since then. China is the largest market for aircraft purchases and an important one for Boeing. The company’s own analysis in August estimated that Chinese airlines are expected to purchase 8,830 new planes over the next 20 years.

Boeing is particularly vulnerable to the current trade disputes between America and its trading partners. Unlike many multinational companies, Boeing builds all of its planes at US factories, sending nearly two-thirds of the commercial planes it builds to customers outside the United States. That makes the company America’s largest exporter.

So, even with its recent problems, Boeing is still a major part of the US economy. The company estimates its annual contribution to America’s economy is $79 billion, supporting 1.6 million jobs directly and indirectly. It has 150,000 US employees.

However, Boeing has largely been shut out of the Chinese market since 2019. Part of that was due to the the trade tensions between China and the United States that started during the first Trump administration. Boeing took orders for 122 planes from Chinese customers in 2017 and 2018. In the six years since then, Boeing has only received orders for 28 planes, and that was mostly for freighters or from Chinese leasing companies, which could be buying them on behalf of airlines outside China. It has not reported a single order for a passenger jet from a Chinese airline.

But it wasn’t all trade tensions. Some of the dropoff was due to problems at Boeing itself, including the grounding of its best-selling 737 Max following two fatal crashes in late 2018 and early 2019. Deliveries to China came to a near halt after the second crash. That’s because aviation authorities in China grounded jets in the wake of the disasters and did not immediately allow for them to return to service even when countries cleared the plane to carry passengers in late 2020. Deliveries only started to rebound last year.

Deliveries are crucial to Boeing, since that’s when it gets paid. The company builds the plane first and gets most of its payment after delivering the finished product. Choking off these deliveries is a particularly big blow for Boeing, which had a total of 55 planes in inventory at the end of 2024 that it has not been able to deliver to customers, primarily those in China and India, according to the company.

Boeing was dealing with a drop in sales for years in China, even before the introduction of tariffs. In response to 145% tariffs put in place on Chinese goods by the Trump administration, China has put tariffs of 125% on all imports from the United States, which would make Boeing’s jets unaffordable to any Chinese customers, even without any new limits on deliveries.

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