China Open To Co-operate With US Firms, Voices Concern Over Trade War Impact As Tariffs Hits Chinese Airlines And Boeing - Boeing (NYSE:BA)

The Chinese commerce ministry stated that U.S.-imposed tariffs have adversely affected Chinese airlines and Boeing BA. The ministry has called on Washington to consider the grievances of these companies and promote a stable trade environment.

What Happened: This marks Beijing’s first remark on the tariffs’ impact on the aviation sector since Boeing returned three 737 MAX planes, initially stationed in China for delivery to Chinese customers, back to the U.S,, Reuters reported on Tuesday.

Last week, Boeing disclosed that due to the tariffs, multiple Chinese customers have refused to accept delivery of new planes, leaving the company to find new buyers for potentially dozens of aircraft. Beijing has also signaled concern over the consequences of the trade war.

The ministry underscored China’s readiness to back normal business collaboration between the two countries and urged Washington to create a predictable trade and investment environment. “China’s affected airlines and Boeing have suffered greatly,” the ministry noted, emphasizing that the U.S. tariffs have disrupted global supply chains, air transport, and investment activities.

Why It Matters: Beijing recently instructed Chinese airlines to halt new Boeing orders and get approval for pending deliveries, making the company the latest U.S. firm affected by the U.S.-China trade war.

The U.S. tariffs have led to a significant disruption in the global supply chain. This development has had a ripple effect across global supply chains and threatened millions of jobs. Chinese manufacturers have had to suspend operations and seek alternative markets due to the impact of these tariffs. The country is also at risk of losing nearly 16 million manufacturing jobs amid the escalating trade tensions, as per Goldman Sachs.

Nevertheless, in a bid to ease trade tensions, China has begun exempting some U.S. imports from high tariffs. Companies in China have been asked by officials to identify essential U.S. goods that are difficult to replace. Some pharmaceutical imports and aerospace parts, including engines and landing gear, have already been exempted from the 125% tariffs. French aircraft engine maker, Safran confirmed that China granted tariff exemptions on certain aerospace equipment parts, including engines and landing gear.

Boeing closed 2.44% higher on Monday following Bernstein's upgrade of the stock from a Market Perform to an Outperform rating and an increase in its price target from $181 to $218.