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Today China cancelled all jet orders from American manufacturer Boeing in response to President Trump hitting the country with tariffs as high as 145% on Chinese goods. China will also no longer purchase any aircraft-related equipment from American companies.
But does it matter for Boeing? Or for the United States trade deficit?
Financial sources we talked to on 'the street' say there will likely not be a large impact. For one, this is an easy choice as the Chinese economy is slowing rapidly under the tariffs, and from its overall 'Ponzi scheme' nature, which has to keep large numbers of Chinese employed shipping goods overseas. This demand has taken a huge hit from the Trump administration's actions.
This slowdown will effect demand for aircraft and parts which would have hit Boeing to a small extent anyway, as a slowing economy needs less air travel.
Goldman analysts Noah Poponak and others reacted to Bloomberg's report earlier this morning regarding China's suspension of Boeing jet deliveries amid the deepening trade war between the U.S. and China, reported Zero Hedge.
"We think the impact to Boeing is very small because China had already stopped taking Boeing deliveries and stopped ordering Boeing aircraft during the last Trump administration, such that there is no real reduction to implement," Poponak wrote in a note to clients in the late afternoon hours of the cash session.
Per company data, customers from China have only ordered 28 aircraft since 1/1/2018 (ex. unidentified customers), and China is 2% of Boeing's large backlog that is sold out through 2030 with other customers. China was in the built but not delivered inventory balance, but the majority of that has now been delivered with around only 25 737-8 MAX aircraft (produced prior to 2023) left designated to the country. Boeing has previously stated that it can build a multi-year delivery skyline assuming China is not taking airplanes over at least a medium-term window, while it operates in a long-term secular growth market where all other regions have substantial growth and replacement needs.
Top Chinese official calls Americans "peasants," says Trump's tariffs will backfire and Americans will be "wailing." The comments were made by the director of China's Hong Kong and Macau Affairs Office Xia Baolong. "The U.S. isn’t after our tariffs but our very survival. The US has repeatedly contained and suppressed Hong Kong … and this will eventually backfire on itself." "Let those peasants in the United States wail in front of the 5,000 years of Chinese civilization." (@CollinRugg)
