Boeing doesn't expect the US trade war with China to slow its recovery
[April 24, 2025] By
MICHELLE CHAPMAN
Boeing CEO Kelly Ortberg said Wednesday that he doesn’t expect the U.S.
trade war with China to forestall the company's financial recovery, nor
prevent it from reaching aircraft delivery targets with Chinese airlines
now refusing to accept Boeing planes.
Speaking on CNBC, Ortberg said that Boeing had three airliners in China
ready for delivery but brought two of them back to Seattle so far
because the Chinese airlines that ordered the planes “stopped taking
delivery of aircraft due to the the tariff environment.”
Beijing increased its import tax on American goods to 125% this month in
retaliation for U.S. President Donald Trump raising the tariff on
products made in China to 145%. China's tariff would more than double
the cost of passenger jets that Boeing, the U.S.' largest exporter,
sells for tens of millions of dollars.
While the company had planned to complete 50 orders for Chinese airlines
this year, Ortberg said Boeing was “actively assessing” options for
diverting those jetliners to other interested buyers.
“It’s an unfortunate situation, but we have many customers who want
near-term deliveries, so we plan to redirect the supply to the stable
demand, and we’re not going to continue to build aircraft for customers
who will not take them,” he said during a conference call with analysts.
The standoff between Washington and Beijing is less of a threat to
Boeing than it might have been a decade ago, when about one-quarter of
the aerospace giant's finished planes went to China, according to
investment banking firm Jefferies.
The company's business in China plummeted in 2019, when the country
became the first to ground all Boeing 737 Max planes following a pair of
fatal crashes that killed 346 people less than five months apart.
Chinese airlines did not resume Max flights until January 2023, much
later than other carriers in other countries.
China currently accounts for about 10% of an order backlog worth $500
billion that Boeing expects will take into the next decade to clear,
Chief Financial Officer Brian West said.
About 70% of the commercial aircraft
the company expects to deliver in 2025 are for international
customers, West said. If tariffs cause countries besides China to
retaliate and put off accepting planes, “we would expect to see
additional pressure” on Boeing's cash supply, he said.
[to top of second column] |
A Boeing 787-9 Dreamliner aircraft operated by China Southern
Airlines sits on the tarmac after the first scheduled direct flight
from the Chinese city of Guangzhou arrived to Liszt Ferenc
International Airport in Budapest, Hungary, Thursday, June 27, 2024.
(Peter Lakatos/MTI via AP, File)
 “Given our position as a significant U.S. exporter, free trade
policy across commercial aerospace remains very important to us,”
West said.
Trump's pursuit of tariffs to counter what he describes as the
unfair trade policies of other nations comes as Boeing looked to
turn the page on a run of problems, including a panel blowing out of
a 737 Max in flight and a labor strike that shut down production
last year. The company saw its revenue and stock value drop sharply.
Ortberg said the first-quarter financial results Boeing reported
Wednesday indicated the company's recovery plan “is in full swing
and showing signs that it's being effective, albeit early.”
Boeing posted an adjusted loss of 49 cents per share on revenue of
$19.5 billion. The results topped the expectations of analysts
surveyed by Zacks Investment Research, which called for a loss of
$1.54 per share on revenue of $19.29 billion.
The company also significantly reduced its cash burn to
approximately $2.29 billion from nearly $4 billion in the prior-year
period.
Shares of Boeing, which is based in Arlington, Virginia, were up
6.6% in afternoon trading.
Trump announced sweeping tariffs on April 2 that triggered panic in
the financial markets and generated recession fears. The president
put a partial 90-day hold on the import taxes but increased his
already steep tariffs against China.
U.S. Treasury Secretary Scott Bessent said in a speech on Tuesday
that situation was unsustainable and he expected a “de-escalation”
in the trade war between the world’s two biggest economies.
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Lisa Leff in London contributed to this report.
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