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Key Takeaways
- Boeing shares plunged Friday as markets continued the slide sparked by the Trump administration's new tariffs.
- China announced on Friday that it would match the 34% tariff on American imports.
- Boeing expects that Chinese demand for new planes and air travel will continue to grow in the next twenty years.
Boeing (BA) shares plunged Friday, as markets continued to sell off after China’s response following the Trump administration’s new duties.
The Chinese government announced on Friday that they would match the tariff of 34% that the Trump administration announced Wednesday, adding this tax to all American imports before April 10.
Boeing is a company which could be affected on both sides of the trade conflict, as it sources parts from all over the world and manufactures its aircrafts in the U.S. Boeing exports their aircrafts to airlines in China, and around the globe.
The company also faces other difficulties, including a looming criminal trial or a revised plea of guilty for defrauding government over violations to certain safety standards. Boeing CEO Kelly Ortberg stated to a Senate committee that the company has made progress in safety reforms.
Recent trading saw Boeing shares down almost 9% to $137.60. Earlier in Friday's session, they hit $132.79, their lowest intraday point since October 2022.
Boeing Has Forecast 8,800 New Planes Bought by China's Airlines in Next 20 Years
Boeing announced in August last year that it expected air travel demand to increase by 5,2% per annum, making China the largest air traffic markets in the world. Boeing projects Chinese demand for 8,800 planes over the next two decades. 60% of the demand will be due to the growth in the air travel market and 40% as older planes are replaced. This is a significant increase on the company’s earlier projections.
Tariffs could be detrimental to both parties, as Boeing claims to be the “largest client of China’s Aviation Manufacturing Industry.” The company reported last year that they spend $1.5 billion on parts, R&D, and other projects in China. They also said that 10,000 of their planes have Chinese components.
Boeing’s U.S. built planes will be more expensive to manufacture, and they will also have lower profit margins when selling them to countries such as China. Boeing’s earnings report on April 23 will provide investors with insight into the impact of tariffs.
