China orders its airlines to stop accepting deliveries of Boeing jets, report says

The Chinese government has told the country’s domestic airlines to stop accepting deliveries of Boeing jets as a trade war between the world’s two largest economies escalates, Bloomberg News reports.

China is also instructing its carriers to stop buying airline parts and other components from U.S. companies, according to Bloomberg, which cited people familiar with the situation. 

Boeing didn’t immediately respond to a request for comment. The aviation giant’s shares fell $4.88, or 3%, to $154.40 in pre-market trading.

The order to stop accepting Boeing jets comes after China boosted its retaliatory tariffs on U.S. goods to 125%. That matches the level of tariffs that President Trump has placed on Chinese imports, although those taxes can rise as high as 145% for some products. China’s tariffs would have more than doubled the price of U.S.-made aircraft and parts, making the cost unaffordable, Bloomberg reported.

Boeing is scheduled to ship about 10 737 Max aircraft to Chinese carriers, including China Southern Airlines, Air China and Xiamen Airlines, Bloomberg reported, citing data from Aviation Flights Group. During the first quarter, Boeing delivered 130 aircraft in all, including more than 100 737 jets, the company said on April 8.

Bloomberg reported that some of the payment and delivery paperwork on some of those jets ordered by Chinese airlines might have been completed before the trade war expanded earlier this month. In that case, some planes might be able to enter China, the news service reported.