Recently, during President Trump’s visit to the Middle East, significant commercial benefits have emerged as news of a major deal between the United States and Qatar surfaced. The deal involves a whopping $96 billion agreement for Boeing aircraft, marking it as the largest single order in Boeing’s history. This came after China had previously ordered its airlines to cease receiving Boeing aircraft as a retaliatory measure during the trade war with the United States, only to lift the ban a month later.
Observers have analyzed that China’s swift reversal from rejecting Boeing aircraft to subsequently lifting the ban indicates a severe miscalculation on China’s part, underestimating Boeing and overestimating themselves. It also highlights China’s lack of a solid stance in the ongoing trade war between the U.S. and China.
President Trump visited Saudi Arabia, Qatar, and the United Arab Emirates from May 13 to 16 to strengthen economic and strategic relations. The White House announced on the 14th that, in the presence of Trump and Qatari Emir Tamim bin Hamad Al Thani, Boeing and GE Aerospace, alongside Qatar Airways, sealed a deal worth $96 billion for the purchase of 210 aircraft, including wide-body planes and 787 Dreamliners.
Throughout the visit, Boeing CEO David Calhoun accompanied Trump, emphasizing the significance of the U.S. aviation industry’s relationship with the Middle East. This transaction not only boosts Boeing’s business but also underscores the pivotal role the Middle East continues to play in the global aviation industry.
The White House further stated that this massive deal is expected to create approximately 154,000 jobs annually in the U.S. and generate over 1 million employment opportunities throughout the production and delivery processes, including other supply chains.
Market analysts have pointed out that demand for wide-body planes has surged significantly since the pandemic, with airlines taking the opportunity to renew their fleets and expand long-haul routes. This hefty order for Boeing will also help strengthen its competitive edge against European rival Airbus in the Middle East market.
Qatar, a non-NATO ally of the U.S., has had a close relationship with the U.S., akin to that of Japan and South Korea, and boasts the largest U.S. airbase in the Middle East.
Encouraged by this historic deal, Boeing’s stock prices surged to a 15-month high, with GE Aerospace also experiencing a boost. Boeing has been gradually reducing its losses in recent times. Calhoun mentioned during the first-quarter earnings call that the company still holds a backlog of over $500 billion in orders, and as global aviation demand rebounds, Boeing’s commercial prospects are steadily improving.
Back in April, amid the tit-for-tat tariffs by the Trump administration, reports emerged of Chinese airlines halting the acceptance of U.S.-manufactured Boeing aircraft. Calhoun confirmed this action on April 23, citing China’s halt in receiving new aircraft due to the U.S.-China trade war, leading to three planes being flown back to the U.S. within a week.
According to reports by China’s First Financial Daily, three Boeing 737 Max aircraft ready for delivery to Chinese airlines at the Boeing Completion and Delivery Center in Zhoushan were recently flown back to the U.S.
Renowned commentator Tang Jingyuan expressed to media outlet that China’s move of refusing Boeing aircraft backfired, likening it to shooting themselves in the foot. China believed that by refusing to accept the already paid-for Boeing aircraft, they could pressure Boeing indirectly, which in turn would exert pressure on President Trump and his administration. However, this tactic resulted in the opposite effect.
Yao Yuan, a professor at the International Studies Lecture of the University of St. Thomas in the U.S., mentioned that China’s action symbolizes a larger significance by intentionally prohibiting Chinese firms from purchasing Boeing, mainly for saving face as an authoritarian state, aiming at surface-level retaliation. However, the real loser in this situation turned out to be China.
Nevertheless, with a breakthrough in U.S.-China trade negotiations and reports from Bloomberg citing insiders, both sides temporarily reduced their tariffs. Following this move, Chinese officials informed domestic airlines on May 14 that the ban was lifted, allowing them to resume receiving and ordering Boeing-manufactured aircraft.
Regarding China lifting the ban on purchasing Boeing aircraft as a part of negotiation tactics in the U.S.-China trade talks, China expert Shan Shu told the media that regardless of the situation, Beijing had already breached the agreement. By backtracking and deciding to acquire Boeing aircraft, it was seen as a strategic move amid the tariff negotiations. However, in the end, China did not gain any advantage. This incident clearly depicts China’s wavering stance during this phase of the tariff dispute.
Why did China find itself in this unsteady position? Tang Jingyuan asserted that China vastly underestimated the popularity of Boeing aircraft in the market and overestimated the importance of China to Boeing. According to the original plan, around 50 Boeing aircraft were supposed to be delivered to China this year. China thought this was a substantial order, believing that Boeing would rely heavily on such a client and could use this dependency as leverage in bargaining against the U.S.
CEO Calhoun stated that if Chinese airlines don’t accept the aircraft, these rejected planes will find new buyers. With a shortage of new aircraft from Boeing and Airbus, global airlines are eager to purchase more aircraft.
Many airlines from various countries are eyeing the opportunity presented by China’s cancellations. Airlines like Malaysia Airlines and Air India are looking to receive these canceled aircraft, accelerate their acquisition plans, and Vietnam Airlines and Czech Airlines are seeking to buy more Boeing aircraft to mitigate the pressure of high reciprocal tariffs imposed by Trump.
Shan Shu stated that China did not anticipate that Boeing would still be highly sought after, with many interested parties even after China rejected them. If China goes back and demands those aircraft again, it might be too late as some could have already reached deals with other buyers.
As for China’s domestically manufactured aircraft, the C919, it has yet to receive approval from U.S. or European aviation regulatory authorities. According to the 2019 China-EU agreement, without consent from the EU, the C919 cannot operate in European airspace.
Director Su Ziyun from the Strategic and Resource Department of the Taiwan Institute for National Defense and Security Studies noted that aircraft represent a significant vulnerability in China’s economy, as many Chinese airlines still utilize Boeing products, creating a reliance on Boeing for follow-up parts. This demonstrates China’s continued high dependence on U.S. and Western industrial technology.
Tang Jingyuan believes that both China and Trump 2.0 are embroiled in serious miscalculations during this trade war. For instance, China believed that the U.S. had a massive dependency on everyday consumer goods produced in China, thinking they could leverage this to force the U.S. to comply. However, as the trade war has progressed, the reality is that China must depend on U.S. purchases because of its surplus production capacity, which only the U.S. market can absorb. This led China to resist for about a month before ultimately agreeing to a trade deal more favorable to the U.S.