Boeing may lose out on China deal thanks to Trump tariff
Jun 21, 2018 02:12PM ● Published by Chris Haire
"In the perennial battle between Boeing Co. and Airbus SE, China has for years tried to keep orders on an even keel between the duopoly. Now, thanks to U.S. President Donald Trump, the American planemaker is at risk of losing its meager lead in the world’s second-biggest aviation market.
With the rising prospect of an all-out trade war after the Trump administration announced tariffs on $50 billion of goods imported from China, President Xi Jinping is under pressure to retaliate. A clue to his tactics may be revealed during French Prime Minister Edouard Philippe’s visit to Beijing this weekend, where he’ll try to seal a deal for more than 180 Airbus A320 jets.
The $18 billion order, if confirmed, would send a strong signal to the U.S. that China has effective options to hit hard where it hurts."
Meanwhile Dhierin Bechai, airlines and aerospace analyst for Seeking Alpha, says:
"The US is in a trade war with China and China could hit the US hard by ordering aircraft from Airbus instead of Boeing, which means it could directly hurt the sales prospect of a company that has been responsible for much of rise of the Dow Jones since late 2016."
However, Bechai says there's still reason to believe Boeing may get part or all of the deal:
"At first, it seems that given the current turmoil between the US and China that the order is a certain win for Airbus. However, things have not been smooth between the EU and China either and the timing of the Request For Proposal likely also is a clear warning sign from China to Europe as well as the US. The China Eastern Airlines group is a state-owned entity, so we cannot rule out that politics will be a decisive factor in the order decision. If restoring the duopoly in the China Eastern Airlines fleet would mean that Boeing has an edge, but if the current installed base is more representative of order chances then it would roll back to Airbus. Whoever wins the bid for 150 aircraft, in the future there will be demand from China Eastern Airlines for more aircraft as there are over 400 single aisle aircraft active for the airline, while there are 130 next generation single aisle jets ordered."