The importation of planes from the USA might lead to millions of US dollars being added to their costs, impacting the production of domestically manufactured passenger aircraft as well.
Even though recent tariffs have been reduced, ongoing levies on U.S. imports may cause Chinese purchasers of Boeing aircraft to incur additional costs totaling millions of dollars compared to previous prices. Additionally, global delivery delays, coupled with this situation, might lead to a significant deceleration in the expansion of China’s air travel capabilities, according to industry experts.
Hindered by tariffs and global supply chain restrictions, China’s civil aviation passenger capacity is expected to increase annually by approximately 3.1 percent on average up to 2028, according to a report from analysts at China International Capital Corporation (CICC) issued on Wednesday.
The capacity expanded at an average yearly pace of 15.4 percent during the ten-year period leading up to 2019.
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The analysts stated that even with reduced tariffs, Chinese airlines continue to be hesitant about importing Boeing planes in the near future due to ongoing duties on U.S. imports which might increase the cost of each aircraft by “several million to over 10 million US dollars.”
They mentioned that deliveries might face delays, and some orders could potentially be canceled by Chinese airlines.
This year, amid the trade disruptions, several Chinese airlines declined to receive deliveries of Boeing airplanes, as stated by the company’s CEO, Kelly Ortberg, last month. Nonetheless, shipments of U.S.-made aircraft apparently restarted once the reciprocal tariff tensions between the two nations eased earlier this month.
CICC analysts highlighted that as major aerospace supply chains extend across Europe, the United States, and China, present tariffs—including those imposed by Washington on European and Chinese goods along with duties levied by Beijing on U.S. products—would likely increase production expenses. This could hinder the resurgence of manufacturing capabilities during the economic rebound.
“Although Boeing and Airbus are slowly reviving their manufacturing capabilities, constrained supply chains and tariff tensions suggest that the aircraft delivery delays may continue to hover at approximately 25 percent through 2025 to 2027,” they explained.
According to analysts’ estimates, approximately 15 percent of Airbus aircraft deliveries to Chinese carriers are experiencing delays, while this percentage rises up to 40 percent for Boeing planes.
The COVID-19 pandemic caused significant disruptions to global aviation supply chains, and the sector still hasn’t completely recovered from the prolonged backlog this created.
In the meantime, analysts reported that the delivery numbers for Comac’s domestically produced C909 and C919 planes decreased by half compared to last year during the initial four-month period of this year, reducing from 14 units down to 7.
“They think the reduction in deliveries might be because of lower market demand and the effect of tariffs, which probably led Comac to modify its production and delivery schedules,” they stated.
Beijing and Washington reached an agreement on
a temporary deal
Earlier this month, they significantly reduced tariffs on each other’s products for the next 90 days. However, certain additional levies remained intact: a 10 percent duty applied by both parties, plus an extra 20 percent tariff on Chinese imports instituted by U.S. President Donald Trump prior to April. This particular levy was intended to curb the illicit entry of the synthetic drug fentanyl into the United States.
Based on information from Boeing’s website, as of the end of last month, out of the total 6,282 unfulfilled commercial aircraft orders, 128 planes were allocated for delivery to customers in China.
Last year, the corporation supplied 56 aircraft to purchasers in China, and in the initial quarter of this year, they delivered another 18 units. However, the most recent major purchase by Chinese customers for Boeing airplanes occurred back in 2017; since then, their counterpart from Europe, Airbus, has been more favored as the primary provider.
Based on statistics provided by the Civil Aviation Administration of China, the nation operated a total of 4,394 airplanes for civilian purposes as of the previous year’s conclusion.
According to the analysis from CICC, the United States tops the list as China’s primary provider of aircraft components, representing more than fifty percent of all imported component values last year. The experts further noted that eliminating these remaining tariffs might cause part scarcity within China and extend the maintenance periods for airplanes.
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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