Tesla Inc. TSLA board member and Elon Musk’s brother, Kimbal Musk, warned on Wednesday that Boeing Co. BA faces significant challenges as U.S.-China trade tensions escalate, potentially benefiting European rival Airbus EADSF.
What Happened: “Boeing is now cancelled in China. The great decoupling begins,” Musk wrote on X, highlighting that each Boeing plane manufactured in America contains approximately 10,000 Chinese-made parts.
His comments follow China’s orders to its airlines to halt Boeing jet deliveries and refrain from purchasing aircraft-related parts from U.S.-based companies. This response to President Donald Trump‘s reciprocal tariffs comes after China imposed 125% retaliatory tariffs on American goods over the weekend.
“Boeing’s prices to Americans will jump sky high because parts to make their planes will be much more expensive,” Musk cautioned. “This means we will make less planes and enable Airbus to take up the demand that Boeing can’t supply anymore to the world.”
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Why It Matters: Boeing reportedly has about 10 737 Max aircraft ready for delivery to Chinese airlines, with some stationed near Seattle and others in Zhoushan, China.
The disruption came as Boeing showed signs of recovery, securing major contracts in March and establishing a promising partnership with VietJet Air, which recently secured $300 million in financing and was considering purchasing 20 Boeing 787 aircraft.
Musk criticized the trade war as showing “a stunning misunderstanding of how global supply chains work,” warning it could result in “less high tech jobs in America and higher prices to travel.”
Price Action: Boeing closed at $155.52 on Tuesday, down 2.39%. After hours, it slipped another 0.97% to $154.01. The stock is down 9.51% year to date.
Boeing currently shows a negative price trend across short to long-term and growth metrics, while maintaining positive momentum, according to Benzinga Edge Stock Rankings. Sign up to learn more.
Photo Courtesy: Tomas Ragina on Shutterstock.com
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