SEOUL: Boeing’s Chinese customers are refusing delivery of new planes built for them due to tariffs, the US planemaker has confirmed, as a third Boeing jet started returning to the US on Thursday.
“Due to the tariffs, many of our customers in China have indicated that they will not take delivery,” CEO Kelly Ortberg said during a first quarter earnings call on Wednesday.
Ortberg said China was the only country where Boeing was facing this issue and the planemaker would redirect new jet supply to other customers eager for earlier deliveries due to a global shortage of new commercial planes.
Before President Donald Trump’s global trade offensive, commercial jets were traded duty-free worldwide under a 1979 civil aviation agreement.
A Chinese airline taking delivery of a Boeing jet could now be hit hard by the retaliatory tariffs imposed by Beijing on the import of US goods. A new 737 MAX has a market value of around $55 million, according to IBA, an aviation consultancy.
Two 737 MAX 8s, which had been ferried to China in March for delivery to Xiamen Airlines, returned to Boeing’s production hub in Seattle in the past week.
A third 737 MAX 8 left Boeing’s Zhoushan completion center near Shanghai for the US territory of Guam on Thursday, data from flight trackers AirNav Radar and Flightradar24 showed.
The plane was initially built for national carrier Air China, according to the Aviation Flights Group tracking database. Air China did not immediately respond to a request for comment.
It had been ferried from Seattle on April 5, in the period between Trump first announcing tariffs on China and Beijing starting to enforce its own ramped up tariffs on US goods.
Guam is one of the stops such flights make on the 5,000-mile (8,000-km) journey across the Pacific between Seattle and Zhoushan, where planes are ferried by Boeing for final work and delivery to a Chinese carrier.
The Chinese government has not commented on why the planes were being returned.
Order book
CFO Brian West said that China represents around 10 percent of Boeing’s backlog of commercial planes.
Boeing had planned to deliver around 50 new planes to China during the rest of the year, West said, and was assessing options for re-marketing the 41 already built or in-process airplanes.
“For the nine airplanes not yet in the production system, we’re engaged with our customers to understand their intentions for taking delivery and if necessary, we have the ability to assign those positions to other customers,” Ortberg said.
“We’re not going to continue to build aircraft for customers who will not take them,” Ortberg said.
Tracking data from Aviation Flights Group shows 36 built aircraft for Chinese customers at various stages of production and testing are now in the US, including the three returned planes.
Boeing data shows 130 unfilled orders for China-based airlines and lessors, including 96 of its best-selling 737 MAX model. Industry sources say a significant portion of the more than 760 unfilled orders for which Boeing has yet to name a buyer are for China.
The tariff war comes as Boeing has been recovering from an almost five-year import freeze on 737 MAX jets into China and a previous round of trade tensions.
West said the issue is a short-term challenge, and that either China starts taking planes again, or Boeing prepares the jets for re-marketing.
“Customers are calling, asking for additional airplanes,” he said.
Washington signaled openness to de-escalating the trade war this week, stating that high tariffs between the United States and China are not sustainable.
However, analysts say that confusion over changing tariffs could leave many aircraft deliveries in limbo, with some airline CEOs suggesting they would defer plane delivery rather than pay duties.
Boeing confirms Chinese customers rejecting new jets due to tariffs
https://arab.news/r9kmf
Boeing confirms Chinese customers rejecting new jets due to tariffs
- Two 737 MAX 8s, which had been ferried to China in March for delivery to Xiamen Airlines, returned to Boeing’s production hub in Seattle in the past week
- A third 737 MAX 8 left Boeing’s Zhoushan completion center near Shanghai for the US territory of Guam on Thursday
US and Mideast countries seek Kyiv’s drone expertise as Russia-Ukraine talks put on ice
KYIV, Ukraine: The United States and its allies in the Middle East are seeking Ukraine's expertise in countering Iran's Shahed drones, according to Ukrainian President Volodymyr Zelenskyy.
Various countries, including the United States, have approached Ukraine for help in defending against the Iranian drones, Zelenskyy said late Wednesday. He said he has spoken in recent days with the leaders of the United Arab Emirates, Qatar, Bahrain, Jordan and Kuwait about possible cooperation.
Russia has fired tens of thousands of Shaheds at Ukraine since it invaded its neighbor just over four years ago, launching a swarm of more than 800 drones and decoys in its biggest nighttime barrage. Iran has responded to joint U.S.-Israeli strikes by launching the same type of drones at countries in the Middle East.
Ukrainian assistance in countering Iranian drones will be provided only if it does not weaken Ukraine's own defenses, and if it adds leverage to Kyiv's diplomatic efforts to stop the Russian invasion, according to the Ukrainian leader.
"We help to defend from war those who help us, Ukraine, bring a just end to the war" with Russia, Zelenskyy said. Later Thursday, Zelenskyy said he had received a U.S. request for support to defend against the drones in the Middle East and had given the order for equipment to be provided along with Ukrainian experts without providing further details.
"Ukraine helps partners who help our security and the protection of our people's lives," he added in a social media post.
Trump, in an interview Thursday with Reuters, said, "Certainly I'll take, you know, any assistance from any country."
Ukraine has battle-tested drone defenses
Ukraine has pioneered the development of cut-price drone killers that cost as little as $1,000, rewriting the air defense rule book and making other countries take notice.
European countries got a wake-up call last September on the changed nature of air defense when Poland scrambled multimillion-dollar military assets, including F-35 and F-16 fighter jets and Black Hawk helicopters, in response to airspace violations by cheap drones.
Ukrainian manufacturers have developed low-cost interceptor drones specifically designed to hunt and destroy Shaheds, and its rapidly expanding drone industry is producing excess capacity.
Zelenskyy announced earlier this year that Ukraine would begin exporting the battle-tested systems.
The European Union's top diplomat, Kaja Kallas, said before chairing a meeting of EU and Gulf foreign ministers via video link Thursday that the talks would look at how Ukraine's experience can help countries counter Iranian drones.
Middle East war delays Russia-Ukraine talks
The Iran war, now in its sixth day, has drawn international attention away from Europe's biggest conflict since World War II, and forced the postponement of a new round of U. S-brokered talks between Russia and Ukraine planned for this week, Zelenskyy said.
Western governments and analysts say the Russia-Ukraine war has killed hundreds of thousands of people, while there is no sign that yearlong U.S.-led peace efforts will stop the fighting any time soon.
"Right now, because of the situation around Iran, there are not yet the necessary signals for a trilateral meeting," Zelenskyy said. "But as soon as the security situation and the overall political context allow us to resume that trilateral diplomatic work, it will be done."
Zelenskyy thanked the United States for the return from Russia on Thursday of 200 Ukrainian prisoners of war. Russia's Defense Ministry also said it received the same number of prisoners from Ukraine and thanked the U.S. and United Arab Emirates for mediating.
Prisoner swaps have been one of the few tangible results of the talks. Vladimir Medinsky, a Russian negotiator, said on social media that a total of 500 prisoners from each side would be exchanged between Thursday and Friday.
Oleksandr Merezhko, the head of Ukraine's parliamentary foreign affairs committee, said Russian President Vladimir Putin is trying to drag out the negotiations so that he can press on with Russia's invasion while escaping further U.S. sanctions.
He urged the U.S. administration to look at the Russia-Ukraine war and the war in the Middle East as linked.
"In reality, Russia and Iran are close allies that act in concert — Iran supplies weapons and Russia helps Iran develop its defense industry. These are interconnected conflicts," Merezhko told The Associated Press.
Ukraine's army has recently pushed back Russian forces at some points along the roughly 1,250-kilometer (750-mile) front line, according to the Institute for the Study of War.
Localized Ukrainian counterattacks liberated more territory than Ukrainian forces lost in the last two weeks of February, the Washington-based think tank said this week, estimating the recovered land at about 257 square kilometers (100 square miles) since Jan. 1.
