Whether or not Boeing has to pay higher import taxes, it could be an important chip in the trade war negotiations.
Boeing can’t afford to lose Chinese sales. But a member of China’s state-run media on Monday suggested that might happen.
“China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China,” tweeted Hu Xijin, editor-in-chief of the Chinese and English editions of the Global Times.
The $1,000,000,000,000 jet market
Comac’s first plane, designed to compete with the single-aisle Boeing 737 Max and Airbus A320, made its first test flight in 2017. It is not yet ready for commercial service, but Boeing can’t afford any missteps.
For its part, Boeing tried to keep a positive outlook about the growing trade war.
“We’re confident the US and China will continue trade discussions and come to an agreement than benefits both US and Chinese manufacturers and consumers,” said a company statement.
Boeing does not have a factory in China. But it did open a 737 completion center there last year to finish planes that had been built in the Seattle area.
Company executives had signaled earlier this year that there could be a lull in orders from China as the trade negotiation take place, but they weren’t worried about the long-term demand for planes from Chinese customers.
“We expect China is a long-term growth market for us, but exactly how those efforts play out over the next quarter or two is still an open question as we proceed with trade discussions,” CEO Dennis Muilenburg said in January.
Muilenburg said he’s confident there is enough benefit to both China and the US to have Boeing products escape a trade war.
“China needs the airplanes for growth to fuel their economy and to meet their passenger growth and cargo growth needs,” he said in January.
737 Max trouble
Even if China continues to buy Boeing planes unabated, it could still exercise leverage in the trade war by refusing to clear Boeing’s troubled 737 Max jet for flight.
The CAAC said at the time of the grounding that it was taking the action because of its “zero tolerance for safety hazards.” But some experts believe the grounding was done at least partly with an eye towards trade talks between the world’s two biggest economies.
Source : Nbcnewyork