Boeing Co., the biggest U.S. exporter, suffered a setback in China after the country proposed an additional 25 percent tariff on U.S. aircraft in a retaliatory move, giving rival Airbus SE a leg-up in a market set to the become the world’s biggest.
In a tit-for-tat response to tariffs by President Donald Trump, China announced the planned levy on aircraft weighing between 15,000 kilograms (33,000 pounds) and 45,000 kilograms, which would include some variants of its 737 family of passenger jets. Single-aisle jets, dominated by Boeing’s 737 and Airbus A320 series, are likely to account for 75 percent of the global market in 20 years, according to Boeing’s estimates.
China, poised to surpass the U.S. as the world’s biggest market for planes by as early as 2022, is crucial for the Chicago-based planemaker. More than 50 percent of the commercial jetliners operating in China are Boeing airplanes, with more than a quarter of its global delivery last year to the Asian giant. Boeing fell as much as 5.1 percent to $314.10 in early New York trading ahead of the U.S. market open.
Boeing and Airbus declined to comment on China’s decision. If the additional levy is approved, the total tariff will be 30 percent.
“Airbus will be the outright winner,” said Shukor Yusof, founder of aviation consulting firm Endau Analytics in Kuala Lumpur. “It’s unprecedented and this is just the beginning. The U.S. stands to lose more from this than China.”
