Boeing Faces New Crisis as Tariffs Threaten Profits and Global Orders

By Evans Momodu, updated 14:40

As the US-China trade war escalates, Boeing is hit by fresh tariffs that may derail its recovery. Learn how trade tensions, order delays, and retaliatory tariffs are shaking America's top exporter.

Already battered by years of setbacks, Boeing is now facing a new challenge: the rising threat of global tariffs. The trade war between the U.S. and China has intensified, casting a shadow over the aerospace giant’s fragile recovery and potentially derailing its role as America’s largest exporter.

Boeing, which supports 1.6 million jobs globally and employs nearly 150,000 Americans, is at the centre of a brewing economic storm. A mix of retaliatory tariffs and longstanding safety and supply chain issues may push the struggling manufacturer deeper into financial turmoil.

The company’s woes began years ago with fatal plane crashes, grounded fleets, quality control scandals, and pandemic-era demand collapses. More recently, a labour strike halted production for two months, compounding the damage.

Now, Boeing faces rising costs from U.S. tariffs on imported parts and the prospect of foreign tariffs on its exported aircraft. These combined headwinds could drive up production costs and shrink global demand just as Boeing tries to regain its footing.

“If you’re thinking about a manufacturing industry that’s a major net exporter, why would you penalise it?” said Ron Epstein, aerospace analyst at Bank of America.

The first visible hit came over the weekend, when two Boeing jets intended for Chinese airlines were returned to Seattle, reportedly due to new Chinese tariffs of 125% on American aircraft. These came in response to a 145% U.S. tariff on most Chinese imports.

While Boeing hasn’t confirmed the diverted deliveries, it hasn’t denied them either. The incident underscores the vulnerability of a company that relies heavily on international customers—particularly China, which Boeing forecasts will account for up to 15% of global aircraft demand over the next two decades.

“Free trade is critical to our business,” Boeing CEO Kelly Ortberg told Congress recently. “We build jobs here at home through global demand.”

In 2017 and 2018, Chinese customers ordered 122 Boeing aircraft. Since then, orders have dropped to just 28—mostly cargo planes or through intermediaries. Boeing hasn't secured a single order for a passenger plane from a Chinese airline since 2019, losing ground to European rival Airbus.

With 195 outstanding orders from Chinese airlines and nearly 700 more from undisclosed buyers (many likely Chinese), Boeing could face mass cancellations if the trade war continues to escalate.

Despite the challenges, Boeing’s Q1 report surprised some analysts. The company posted a smaller-than-expected operating loss of $0.49 per share, signaling progress in internal operations. Ortberg remained cautiously optimistic in a letter to employees.

“While global trade remains a concern, our backlog and demand give us flexibility,” he wrote, noting the company’s half-trillion-dollar order pipeline.

Still, with China’s market in jeopardy and the possibility of other nations introducing tariffs on U.S. aircraft, Boeing could become a key pawn in an expanding global trade war.

“Boeing is an easy target,” said Epstein. “Tariffing Boeing is an obvious thing to do—politically and economically.”

While Boeing could potentially redirect aircraft to other global buyers, the trade war’s broader impact on the global aviation market could suppress demand across the board. For now, all eyes are on Wednesday’s investor call, where Boeing execs are expected to address the growing uncertainty.

If the international trade landscape doesn’t stabilise, Boeing’s future—as well as the future of American aerospace manufacturing—could hang in the balance.
Source: CNN