Boeing jet returns to US from China, a victim of Trump’s tariff war

SEATTLE: A Boeing BA.N jet intended for use by a Chinese airline landed back at the planemaker’s US production hub on Sunday, a victim of the tit-for-tat bilateral tariffs launched by President Donald Trump in his global trade offensive.

The 737 MAX, which was meant for China’s Xiamen Airlines, landed at Seattle’s Boeing Field at 6:11 pm (0111 GMT), according to a Reuters witness. It was painted with Xiamen livery.

The jet, which made refueling stops in Guam and Hawaii on its 8,000-kms return journey, was one of several 737 MAX jets waiting at Boeing’s Zhoushan completion center for final work and delivery to a Chinese carrier.

Trump this month raised baseline tariffs on Chinese imports to 145 percent. In retaliation, China has imposed a 125 percent tariff on US goods. A Chinese airline taking delivery of a Boeing jet could be crippled by the tariffs, given that a new 737 MAX has a market value of around $55 million, according to IBA, an aviation consultancy.

It is not clear which party made the decision for the aircraft to return to the US Boeing did not immediately respond to request for comment. Xiamen did not respond to request for comment.

The return of the 737 MAX, Boeing’s best-selling model, is the latest sign of disruption to new aircraft deliveries from a breakdown in the aerospace industry’s decades-old duty-free status.

The tariff war and apparent U-turn over deliveries comes as Boeing has been recovering from an almost five-year import freeze on 737 MAX jets and a previous round of trade tensions.

Confusion over changing tariffs could leave many aircraft deliveries in limbo, with some airline CEOs saying they would defer delivery of planes rather than pay duties, analysts say.

Commercial plane prices, already lifted in recent years due to pandemic supply chain shocks, are poised to climb further as Boeing and Airbus are buffeted by trade tariffs.

“Compared with 2018, prices for commercial jets have risen by around 30 percent,” an aviation expert told AFP on condition of anonymity.

The American and European aerospace giants have grappled with higher expenses for primary materials such as titanium, components and energy, as well as overall labor cost pressures.

To resolve a labor strike, Boeing late last year agreed to a new contract with its Seattle-based machinist union that lifted wages by 38 percent over four years.

Just months earlier, Spirit AeroSystems, a major supplier to both Boeing and Airbus, reached an agreement with similar wage increases.

Richard Aboulafia, managing director at consultancy AeroDynamic Advisory, said items that have inflated “at a particularly high rate” include castings, forgings and “anything titanium... especially since all that Russian capacity has been cut off from the US and, to a lesser extent, from Europe.”