China lifts restrictions on Boeing plane deliveries

In a trade truce with the US, Beijing tells Chinese airlines that they can resume taking delivery of pre-existing jet orders.

China is among Boeing’s largest markets. Picture: Jason Redmond / AFP

China has reopened itself to Boeing, the biggest US exporter, after the two nations reached a temporary truce in their trade war.

Reversing an earlier restriction, Beijing has told the country’s airlines that they can take delivery on pre-existing Boeing jet orders, according to people familiar with the situation.

The government last month told Chinese carriers they had to seek additional approval before taking delivery of Boeing aircraft they had already ordered, in effect halting deliveries to one of Boeing’s biggest markets.

Bloomberg earlier reported that China has resumed allowing Boeing jet deliveries.

Chinese airlines, which also balked at paying tariffs of more than 100 per cent, shipped several Boeing jets back to the U.S. that had been in China awaiting final delivery. The returns tied up hundreds of millions of dollars in revenue for Boeing.

It is unclear when or if Chinese airlines will resume receiving Boeing jets. Shipping planes internationally can be a lengthy process, and the planes are still subject to higher-than-usual tariffs while the US and China work on a more permanent trade deal.

Losing access to the Chinese market dented Boeing’s revenue at a moment when the company is working to stem its cash burn and emerge from a yearslong financial crisis. Boeing forecasts that in the next two decades the Chinese market will grow to account for a fifth of the world’s airplane deliveries.

Chief Executive Kelly Ortberg said in April that Boeing would stop making jets for China if airlines wouldn’t take the planes and that Boeing could find other buyers for jets rejected by China. He said Chinese airlines returned the planes because of high tariffs resulting from the US-China trade war.

The aerospace giant also is a beneficiary of the trade deal struck last week between the US and UK.

Commerce Secretary Howard Lutnick, in announcing the deal, said the US agreed to lift tariffs on Rolls-Royce jet engines and that a British airline—later announced as British Airways—was buying $10 billion worth of Boeing planes.

Boeing shares were up more than 2 per cent in morning trading.

Wall Street Journal