The Sino-US tariff war continues to escalate, with Beijing recently ordering domestic airlines to return the ordered Boeing 737 MAX aircraft, a swift move that has drawn international attention. This action is seen as retaliatory countermeasures against the high tariffs imposed by the United States on China. However, several experts point out that this policy from China may backfire, not only damaging their reputation but also potentially impacting the long-term development of the Chinese aviation industry, akin to “tactical retaliation leading to strategic self-harm”.
According to reports from The Wall Street Journal and Reuters, Boeing CEO Kelly Ortberg confirmed during an internal meeting on April 23 that China has officially rejected three 737 MAX aircraft orders, stating, “We will not continue to produce aircraft for customers who refuse to accept them.” These aircraft will be resold to other buyers.
Flight data website Flightradar24 shows that the latest aircraft originally destined for Air China took off from Zhejiang Zhoushan Delivery Center on April 24, flying back to the US headquarters in Seattle via Guam. Additionally, two Xiamen Airlines ordered aircraft have been returned to the US. Boeing CFO Brian West disclosed that the company had initially planned to deliver approximately 50 aircraft to Chinese airlines this year, and they are currently reassessing the resale plans for the remaining 41 aircraft.
American economist Davy J. Wong, in an interview with Epoch Times, commented on this event, stating that China’s cancellation of orders outwardly showcases a tough stance towards Washington but is actually a “strategic suicide”. He emphasized that despite China vigorously promoting its domestically produced commercial aircraft C919, crucial components such as avionics, engines, and hydraulic systems still heavily rely on European and American technology and suppliers, with “the core supply chain of American companies remaining indispensable”.
He further cautioned that if the Chinese authorities terminate their commercial cooperation with Boeing on political grounds, it could not only hinder the production and maintenance of C919 but also shake the international market’s confidence in the Chinese civil aviation system. Financial institutions, leasing companies, and insurers may reassess the risks and stability of the Chinese market.
Wong specifically noted that one key observation point following this development would be the actions of Xiamen Airlines. The company has primarily procured Boeing aircraft and has minimal Airbus models. If they decide to completely cancel orders, it would be a clear signal driven by policy. He warned, “This may not just be a trade dispute but a comprehensive confrontation involving industrial dominance and geopolitical strategic layout.”
Boeing has taken a tough stance in response. Apart from the CEO publicly stating they will no longer produce new planes for customers who reject them, CFO West also revealed that multiple countries had proactively inquired about the possibility of purchasing these aircraft.
Regarding China’s breach of contract, US President Trump posted on Truth Social, stating, “This is just a small part of what China (CCP) has done to the US over the years.” He urged Boeing to view China as the defaulting party and handle any related contract disputes accordingly.
It is reported that Chinese orders currently account for only 10% of Boeing’s overall inventory, significantly lower than the peak of 25% in the past. Boeing is considering reselling the 41 canceled orders to markets in India, Southeast Asia, and Latin America. Although media like Leeham News cautioned that retrofitting certain models could cost millions of dollars, emerging markets continue to show a keen interest in this.
When interviewed by Epoch Times, Researcher Shen Mingshi from Taiwan’s Institute for National Defense and Security Studies stated that this wave of cancellations has limited damage to Boeing itself but has instead isolated China in the industrial field. He pointed out that global demand for Boeing 737 MAX is currently robust, with production lines scheduled years ahead, so following China’s cancellation, Boeing could swiftly resell the aircraft to other airlines.
He emphasized, “After the CCP cancels the order, the initially paid deposits will be confiscated by Boeing, resulting not only in financial losses but also highlighting the reality of nationalist sentiments overriding rational economic judgments.”
Shen Mingshi further pointed out that if the US enforces export controls on aerospace industry parts to China, production lines of domestically made models like C919 could be paralyzed, terming this as a typical case of a decision resulting in “losing both the pawn and the general”.
Assistant Researcher Wang Xiuwen from Taiwan’s Institute for National Defense and Security Studies also noted that China’s actions go against basic principles of commercial contracts, stating, “After placing an order, refusing to accept the aircraft could lead to Boeing potentially filing a lawsuit under the law.” Additionally, if Boeing ceases to supply the necessary technical expertise and parts for maintenance, the Chinese civil aviation sector may face airworthiness and safety risks, raising concerns about overall operational stability.
Wang Xiuwen bluntly stated, “Using this strategy to pressure the US, China may end up hurting itself in the end.” Adding that similar actions could potentially affect other sectors reliant on US supplies, such as medical equipment, agricultural machinery, heavy industrial equipment, and imported pharmaceuticals.
Davy J. Wong asserted, ” ‘Boycotting Boeing’ is not just about banning a few aircraft; it dismantles an entire supply chain and ecosystem.”
Wang Xiuwen further emphasized that today’s Chinese economy can no longer afford the cost of completely decoupling from the US, stating, “The Chinese people are no longer the Cultural Revolution generation willing to tighten their belts; continued economic hardships could lead to broader social discontent.”