Boeing came under pressure on Tuesday after China reportedly ordered airlines to stop purchasing American products.
Shares of the company fell 3% on the news.
The move would reportedly be a retaliation for the U.S.-China trade war.
Trend: Boeing shares plunged 3% on Tuesday. The airline stock has fallen 12% so far this year.
Reason: China ordered domestic airlines to stop buying aircraft products from the United States, according to Bloomberg. Previously, China imposed a 125% import tariff on American products, a move that exacerbated the U.S.-China trade war.
Bloomberg cited people familiar with the matter as saying that China is looking for ways to assist airlines that rely on leasing Boeing aircraft.
Significance: China’s order will reportedly effectively block Boeing from entering one of the world’s largest aviation markets. China is expected to account for 20% of global aircraft demand in the coming decades, Bloomberg said.
The impact could be immediate. Boeing still has several completed aircraft scheduled for delivery to China. Some of those paid aircraft may be allowed into China on a case-by-case basis, people familiar with the matter told Bloomberg.
The development could be good news for Airbus. The European rival has gradually surpassed Beijing in aircraft numbers in China, and its influence could grow further. Airbus’ American depositary receipts are down about 2% this year.
China’s decision is even worse for Boeing, which is losing money on its aircraft inventory in 2024 after a challenging year in which it faced lawsuits, mechanical failures and leadership changes.
