China says willing to cooperate with US firms after Boeing spat

[HONG KONG] China is willing to support normal cooperation between US companies, the country’s Ministry of Commerce said on Tuesday (Apr 29), just days after Chinese airlines rejected taking delivery of any new jets from US planemaker Boeing.

Officials in Beijing acknowledged that tariff hikes implemented by US President Donald Trump have disrupted the global air transport market, and both Chinese airlines and Boeing have been severely affected. As a result, China hopes the US can create a stable and predictable environment for normal trade and investment activities, according to Tuesday’s statement.

China earlier this month ordered its airlines not to take any further deliveries of Boeing jets as part of the tit-for-tat trade war that’s seen Trump levy tariffs of as high as 145 per cent on Chinese goods. The order came after China unveiled retaliatory tariffs of 125 per cent on American goods, levies that would have more than doubled the cost of US-made aircraft and parts, making it impractical for Chinese airlines to accept Boeing planes.

Boeing chief executive officer Kelly Ortberg confirmed last Wednesday that China has stopped taking deliveries of any planes and said the planemaker is prepared to find alternative buyers for China-bound aircraft.

“We are in close communication with our China customers and we are actively assessing options for remarketing already built or in process airplanes,” Ortberg said during Boeing’s earnings call.

The move has left in doubt the fate of about 50 jets that were slated to go to China this year. Boeing has since begun flying 737 Max jets that were refused by Chinese airline customers back to the US.

Among airlines that are willing recipients of the aircraft rejected by China is Air India. Through the end of last month, the Indian airline had accepted 41 737 Max jets originally built for Chinese airlines, and the carrier has signalled it’s eager to take more, Bloomberg has reported.

An olive branch from Beijing would be a boon for Chinese airlines, many of whom had been relying on Boeing jets for their expansion plans. China is forecast to make up 20 per cent of global aircraft demand over the next two decades and in 2018, nearly a quarter of Boeing’s output ended up there. BLOOMBERG