China took less than 24 hours to respond to proposed U.S. tariffs with a 106-item list of its own that could affect $50 billion worth of U.S. imports, potentially including some of Boeing’s 737 airplanes.
The impact on Boeing isn’t yet clear, and the tit-for-tat trade sanctions on aerospace goods have not yet been implemented. Hours after China announced its move, Boeing issued a statement voicing hope that Washington and Beijing will be able to avoid a trade war:
“Boeing is confident that dialogue continues. While both governments have outlined positions that could do harm to the global aerospace industry, neither has yet imposed these drastic measures. We will continue in our own efforts to proactively engage both governments and build on the recent assurances by U.S. and Chinese leaders that productive talks are ongoing. A strong and vibrant aerospace industry is important to the economic prosperity and national security of both countries.”
The plan that China laid out would impose tariffs of up to 25 percent on airplanes weighing between 15 and 45 metric tons. Reuters’ analysis indicates that Boeing’s biggest-selling 737 model, the MAX 8, would be about 70 kilograms (154 pounds) heavier than that range if “operating empty weight” is used as the definition.
That suggests the MAX 8, 9 and 10 wouldn’t face tariffs under the plan announced today. But the MAX 7 and older-generation 737s might. Boeing’s twin-aisle models, including the 777 and 787 Dreamliner, would be unaffected.
The added duty on airplanes could also have an impact on sales of U.S. business jets, such as those made by Gulfstream.
Another major category affected by the proposed tariffs would be soybean imports from the U.S., which were said to be worth $14 billion last year. China’s list also includes wheat, corn, cotton, sorghum and beef — a significant array of targets for America’s agricultural sector.
Other products run the gamut from whiskey and tobacco to passenger cars.
There’s no specified timetable for China’s tariffs to take effect, but the quick issuance of the list is clearly a tit-for-tat response to the list laid out Tuesday by the Trump administration. The U.S. tariffs, which address complaints about China’s practices with regard to technology transfer and intellectual property policy, won’t take effect until next month at the earliest.
That could provide an opening for trade negotiations — but some analysts worry that the measures and countermeasures could lead instead to a wider trade war. Such concerns led to an early drop in market indexes today, followed by a comeback.
Boeing’s stock was down about 1 percent for the day at $327.44. Share prices for Airbus, Boeing’s European rival and the presumed beneficiary of a U.S.-China trade dispute involving airplanes, were down 0.8 percent at $92.81.