Aviation

China’s Boeing boycott opens doors for Gulf carriers

April 25, 2025, 7:38 AM

Boeing's factory in Kansas. Chinese customers are declining aircraft deliveries due to the ongoing trade conflict with the US

Tariffs put 50 aircraft on hold
Could re-market elsewhere
Middle East expanding fleets

China’s escalating trade standoff with the US is reverberating through the global aviation industry, offering opportunities for Gulf airlines, as Chinese carriers refuse to accept US-built Boeing aircraft.

Speaking on a first quarter earnings call on Wednesday, Boeing CEO Kelly Ortberg confirmed that several Chinese customers have declined to accept new aircraft due to retaliatory tariffs introduced during President Donald Trump’s second term.

“Due to the tariffs, many of our customers in China have indicated that they will not take delivery,” Ortberg said.

Boeing had intended to deliver 50 aircraft to China this year. Of those, 41 have already been built, with nine more in the production queue, according to CFO Brian West.

“We’re not going to continue to build aircraft for customers who will not take them,” Ortberg added, highlighting the risk of inventory overhang and supply chain disruption.

Beijing has responded to US tariffs – some as high as 245 percent on Chinese goods – with its own retaliatory levy of 125 percent on US imports, which now includes Boeing aircraft.

The dispute has sparked concern from across the aerospace sector. On Tuesday, GE Aerospace CEO Larry Culp urged a return to the 1979 Agreement on Trade in Civil Aircraft, calling for a tariff-free regime during a meeting with President Trump.

“Right now, China is our only problem. We’re going to work our tail off to make sure this doesn’t threaten our recovery and stability,” Ortberg said.

China represents roughly 10 percent of Boeing’s commercial aircraft backlog, which stands at 5,600 planes worth an estimated $545 billion.

But as China cools on US aircraft, demand elsewhere is heating up.

“Customers are calling asking for additional aeroplanes,” Ortberg said. “This is a short-term challenge – either China reverses course or we re-market those aircraft elsewhere.”

That “elsewhere” may increasingly point to the Middle East, where airlines are aggressively expanding their fleets. Emirates airline, the Dubai flag carrier, has 314 aircraft on order from Airbus and Boeing, including the delayed 777X, which has drawn criticism from Emirates president Tim Clark over delivery timelines.

According to Linus Bauer, managing director of aviation consultancy BAA & Partners, the freeze in Chinese orders may lead to a reshuffling of Boeing’s production queue – freeing up delivery slots for carriers in the Gulf.

“For well-capitalised carriers in the region – Emirates, Qatar Airways, and Saudia among them – there is a clear window to renegotiate delivery timelines or secure earlier positions, especially as the geopolitical centre of gravity in aviation continues to tilt toward the Gulf,” Bauer said.

Writing in his column for AGBI, John Grant, partner at Midas Aviation, said carriers looking for smaller narrow body aircraft could stand to benefit the most from China’s decision, which would favour deliveries to the region’s low-cost carriers.

European rival Airbus is also navigating choppy waters. Its aircraft could soon face a 20 percent tariff on deliveries to the US, potentially complicating transatlantic deals.