Market Analysis

Image Credit: Reuters

A second Boeing 737 MAX jet intended for a Chinese airline was returned to the U.S. on Monday, flight tracking data indicated, marking another consequence of the escalating trade tensions between the U.S. and China. The aircraft, which had been at Boeing's Zhoushan completion center near Shanghai, made a stop in Guam during its journey back to the U.S. The return of the plane follows the earlier return of another 737 MAX, painted for China's Xiamen Airlines, to Boeing Field in Seattle on Sunday.

The reason for the return of the two jets remains unclear, but the ongoing tariff dispute between the U.S. and China is likely a major factor. President Trump recently increased tariffs on Chinese imports to 145%, prompting China to impose retaliatory tariffs of 125% on U.S. goods. A Chinese airline accepting a new Boeing 737 MAX would face significant costs due to these tariffs, which could undermine the value of the aircraft, typically worth around $55 million.

This marks another setback for Boeing, which has been dealing with disruptions in aircraft deliveries due to the tariff war. The return of these planes highlights the impact of the trade conflict, as the aerospace industry, which once enjoyed duty-free status, now faces uncertainty about future deliveries. Boeing, recovering from a previous import freeze on 737 MAX jets, has not yet commented on the situation. The tariff dispute could leave many aircraft deliveries in limbo, with some airlines considering deferring their orders to avoid paying higher duties.

Paraphrasing text from "Reuters" all rights reserved by the original author