Boeing Co. has found itself at the center of the raging trade war between the U.S. and China, with the latter reportedly instructing its airlines to halt deliveries of the U.S.-made jets.
The ongoing trade war and China's decision to halt Boeing deliveries exacerbate the company's existing operational challenges, justifying a bearish 'sell' rating. Boeing's market share is threatened by Airbus, with significant job losses and economic repercussions if Boeing's issues persist. Despite some new orders from other Asian countries, the uncertainty with China poses a substantial risk to Boeing's future growth.
Boeing shares fell 2.4% on Tuesday as China reportedly halted orders amid ongoing tariff tensions. China Southern Airlines stopped its plan to replace 10 Boeing 787-8 because of trade restrictions.
It's been less than a month now since Boeing's (BA -2.31%) big news: On March 31, President Donald Trump announced that Boeing has won a $20 billion contract (that's the expected minimum value) to build the U.S. Air Force's first-ever sixth-generation stealth fighter to be known as the F-47.
China tells domestic airlines not to place new orders for Boeing jets, adding new pressure to the struggling American plane maker.
China has ordered its airlines not to take any further deliveries of Boeing jets in response to the U.S. decision to impose 145% tariffs on Chinese goods, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Boeing Co (NYSE:BA, ETR:BCO) may face short-term turbulence after China reportedly halted deliveries of its jets and directed airlines to stop purchasing US aircraft parts, but Bank of America analysts believe the impact on the American planemaker will be limited. According to Bloomberg, Chinese regulators have paused all Boeing aircraft deliveries and asked domestic carriers to cease buying aircraft-related equipment and parts from US firms.
Aircraft manufacturer Boeing Co (NYSE:BA) is pumping the breaks on its recent rally.
Boeing's stock has been volatile due to US-China trade tensions, but recent order inflows show strong demand and confidence in Boeing's products. In March, Boeing secured 192 airplane orders worth nearly $22 billion, significantly higher than the previous year's figures, indicating robust market demand. Boeing delivered 41 airplanes in March, maintaining a steady delivery rate, which suggests successful inventory reduction and increased production capabilities.
Boeing has delivered 18 aircraft to nine Chinese airlines so far this year, numbers show. However, they have been told not to accept any further deliveries.
Boeing's shares slid sharply in premarket trading early on Tuesday, after Bloomberg reported that the Chinese government had ordered the country's airlines to stop taking deliveries of new aircraft from the American plane maker amid an escalating trade war between Beijing and Washington.
Boeing gets caught up in the trade war between the world's two largest economies.