1. Airlines

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2. Barron's Take

China Returns Boeing Jets. It’s a Headwind for the Stock.

By Al Root

Updated April 17, 2025, 11:18 am EDT / Original April 17, 2025, 9:49 am EDT

Boeing stock was up 1.5% at $158.72. The S&P 500 

SPX

+0.92%

 was down 0.1% and the Dow Jones Industrial Average 

DJIA

-0.60%

 was down 1.6%. The Dow was hurt by a weak earnings report from UnitedHealth Group.

It’s a counterinutitive move, but coming into Thursday trading the stock was down about 7% since Trump’s April 2 tariff announcement.

Boeing will release first-quarter earnings on April 23 Investors will be looking for more detail about how the trade war and tariffs could impact the company.

Tariffs can raise costs, but trade retaliation could hurt Boeing even more. In 2024, almost 70% of sales in the company’s commercial-airplane division were to entities outside the U.S.

Write to Al Root at allen.root@dowjones.com 

Boeing 

BA

+4.58%

 manufactures many commercial jets in the U.S., and exports them all over the world. That’s great in normal times and bad when a trade war is raging.

China recently returned three 737 MAX jets from the Zhoushan completion center to Seattle, according to the Air Current. Boeing declined to comment.

The return of planes is the latest escalation. On April 2, President Donald Trump announced a 34% “reciprocal” tariff rate on imports of Chinese goods. After mutual retaliation, the rate on most Chinese imports is 145%. The rate at which China charges U.S. imports is 125%. According to reports, China is also restricting exports of rare earth metals.

China would suspend Boeing deliveries, reports from this past week also indicated. That’s one possible reason for the refusal. Although the Chinese Ministry of Foreign Affairs said earlier this week it wasn’t familiar with a no-jet edict, adding one could have been given to other government officials.

Another—simpler—reason for refusal is just the tariffs. Paying 125% tax on a purchase is enough to shut down almost any transaction. Whatever the reason, the return is another example of trade war impact.

“These planes were supposed to go to two Chinese carriers (Xiamen and Air China), but they have refused to take the aircraft,” wrote Vertical Research Partners analyst Rob Stallard in a Thursday report. “The last Boeing aircraft to be delivered to China was handed over on April 8, the day before the U.S. started the trade war.” He rates Boeing stock at Hold with a $146 price target.

Including Hong Kong, the number of Chinese-bound jets in backlog rises to about 160 jets, says Stallard. That’s roughly 3% of Boeing’s backlog. China accounts for about 6% of Airbus’ backlog. “Undisclosed” customers account for about 12% of each company’s backlog. Some of those planes would likely find their way to China.

Backlog statistics understate the importance of the Chinese market. Boeing expect the country to need some 9,000 planes over the next 20 years. Boeing would like to—at least—split the market with Airbus.