The Trump administration's insistence on escalating the tariff war with China has now affected aviation giant Boeing. On April 18 and April 21, two Boeing 737 Max 8 aircraft painted in Xiamen Airlines livery left Zhoushan, China, returning to the United States.
This follows market rumors that several Chinese airlines have suspended or delayed the acceptance of Boeing aircraft, which has now materialized. A representative from Xiamen Airlines confirmed to the Hong Kong Wen Wei Po that two undelivered Boeing planes were indeed returned to the U.S., acknowledging the connection to the current high tariff policies. Experts and industry insiders suggest that if the U.S.-China tariff war escalates further, Boeing could suffer significant losses, while the development of Chinese commercial aircraft is likely to accelerate.
The First 737 Max 8 Has Arrived in Seattle
On April 18, an aviation blogger based at Zhoushan Putuoshan International Airport, "Venusyaaaaa," posted on social media with images stating, "A Xiamen Airlines 737 Max 8 departed Zhoushan early in the morning to return to the U.S. for storage; this is also the first instance of a 'return' from Boeing's Zhoushan factory." On the 21st, the same blogger posted again with images, "A second Bai Lu 737 Max 8 (B-20CQ) left the Boeing Zhoushan factory to return to the U.S. for storage." Earlier that same day, a well-known aviation blogger reported that the first Xiamen Airlines-branded 737 Max 8 to be "returned" has already arrived in Seattle, sharing photos of the aircraft taxiing after landing.
A Hong Kong Wen Wei Po reporter promptly called Xiamen Airlines to verify the accuracy of this information. Xiamen Airlines confirmed, "We indeed have two undelivered aircraft that have returned to the U.S." While they did not elaborate further, they also acknowledged the relation to the current high tariff policy.
It is worth noting that on April 8, the aviation blogger "Venusyaaaaa" had previously posted with images stating that the latest Max 8 from Air China had arrived in Zhoushan. Comments indicate that this is currently the only remaining aircraft at Boeing's Zhoushan factory, and it is highly likely to face a similar fate of being "returned" to the U.S. The Hong Kong Wen Wei Po reporter also reached out to Boeing on the 21st for confirmation, but received only the response that "there is no information available at this time."
Experts: Increased Probability of Losses in the Aviation Industry
Li Yanhua, director of the Civil Aviation Transportation Department at Beijing Jiaotong University, believes that the situation arises from the pressure of high tariffs, stating, "An increase of over 100% in tariffs is unacceptable for Chinese airlines. Regardless of whether there is a national notification, airlines themselves would refuse to accept the aircraft." Senior engineer Huang He from a domestic airline stated, "Accepting the aircraft would mean paying double the price; no one would do that, as the penalty cannot exceed the aircraft's sale price."
"China needs aircraft, and Boeing also needs the Chinese market," acknowledged Lin Zhijie, an expert in the civil aviation field. "However, under the current tariff rates, American planes will not be able to enter the Chinese market, and aircraft deliveries will certainly be suspended. The tariff war benefits neither side." Huang He also mentioned that, from the perspective of the aviation transport industry, the U.S.-China trade war will inevitably lead to severe decoupling between the two countries, reducing business travel demand and drastically decreasing flight volumes, increasing the probability of losses in the aviation transport sector.
Huang He views the return of undelivered Boeing aircraft by Chinese airlines as having little immediate impact on Boeing's manufacturing operations. "Boeing can prioritize orders from other countries, putting Chinese airline orders on hold. If the aircraft are returned, according to the contract, domestic airlines must pay Boeing a penalty for breach of contract. If confirmed, after paying the penalty, the aircraft's ownership will revert to Boeing. Other foreign airlines or leasing companies may buy the aircraft at a premium to obtain them. Thus, Boeing not only profits from the penalty but also from selling the aircraft at a higher price, which is commercially beneficial."
"However, the short-term profits from the potential change of ownership are negligible compared to the market share that could be lost in the long term," analyzed Huang He. If the situation between the U.S. and China does not improve, the orders originally placed by China with Boeing will likely shift to Airbus or COMAC, seriously damaging Boeing. If things escalate further, it will inevitably impact Boeing's market share in China. "Boeing's business in China accounts for about one-third of its overall business, which is a significant impact. Since 2005, Boeing has maintained a roughly equal market share with Airbus in China's trunk market, but this may soon become unsustainable."
Boeing's Zhoushan Factory May Face Another "Shutdown"
Since its establishment in 2018, Boeing's Zhoushan factory has faced numerous challenges. It first encountered the global grounding of the 737 MAX, then struggled to resume deliveries due to the pandemic, finally resuming deliveries last year, and now faces the impact of the tariff war, which may lead to another "shutdown."
Huang He stated that Boeing's Zhoushan factory comprises completion and delivery centers, and does not involve aircraft manufacturing; therefore, a "shutdown" will not affect Boeing's R&D, manufacturing, or sales. However, if Boeing ceases deliveries to Chinese airlines, the Zhoushan factory will have nothing to do. The operational and maintenance costs for the facility and staff will become a significant challenge. "It won't be easily shut down, as it still leaves a door open. If it is shut down, it will be difficult to resume operations."
Boeing Faces Dual Pressure with over 130 Unfulfilled Orders
According to data cited by Reuters from Boeing, there are still 130 unfulfilled orders from Chinese airlines and leasing companies. Industry insiders indicate that a significant portion of the more than 760 unfulfilled orders, for which Boeing has not yet disclosed the buyers, are from China.
Reports from mainland financial news indicate that Boeing is one of the most affected companies amid the tariff war between the world's two largest economies, facing challenges both in deliveries and in its supply chain.
"It can be said that every time passengers fly on a Boeing aircraft, they are accompanied by components made in China," stated Liu Qing, president of Boeing China, in June 2024. He noted that Boeing has over 35 direct suppliers in China, contributing to the manufacturing of all Boeing aircraft models, including the 737, 767, 777, and 787 Dreamliner. Liu also mentioned that Boeing has been established in China for over 50 years, with its business contributing more than US$1.5 billion annually to the Chinese economy. Components and assemblies made in China are used in over 10,000 Boeing aircraft flying worldwide.
In addition to the direct costs imposed by tariffs on components and materials, Boeing CEO Kelly Ortberg recently expressed concerns about the impact of tariffs on Boeing's supply chain and export capabilities. Financial reports show that for the entire year of 2024, Boeing's revenue was US66.5 billion, with deliveries of 348 commercial aircraft, marking declines of 14% and 34% year-over-year, respectively, resulting in a loss of 66.5 billion, with deliveries of 348 commercial aircraft, marking declines of 1411.8 billion-the largest loss Boeing has faced since 2020.
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