Boeing Caught in U.S.-China Tariff War Crosshairs, But Goldman Sachs Predicts Resilience

Boeing, a cornerstone of American aerospace, is facing significant challenges as it finds itself entangled in the escalating U.S.-China tariff war, with China ordering its airlines to halt deliveries of Boeing jets and U.S. aircraft parts in retaliation to President Donald Trump’s 145% tariffs on Chinese goods.

The move has sent Boeing’s stock tumbling and raised concerns about its market share in China, a critical growth region. However, analysts at Goldman Sachs remain optimistic, citing Boeing’s ability to weather similar disruptions during Trump’s first term when China also suspended purchases, suggesting the company’s long-term survival is not at risk.

The U.S.-China trade conflict intensified in April 2025, with Trump imposing tariffs as high as 145% on Chinese imports, prompting China to retaliate with 125% tariffs on U.S. goods, including aircraft. This tit-for-tat escalation led China to direct its airlines, including state-owned giants Air China, China Eastern, and China Southern, to stop accepting Boeing jet deliveries and halt purchases of U.S.-made aircraft parts, according to Bloomberg. The order effectively doubles the cost of Boeing planes for Chinese carriers, rendering new purchases economically unfeasible.

A notable example of the fallout came from China Southern Airlines, which suspended the sale of 10 used Boeing 787-8 Dreamliners on April 11, 2025, citing “matters affecting the property transaction,” as reported by Nikkei. This decision may reflect either China’s directive or the prohibitive costs imposed by the 125% tariffs. Boeing’s stock fell 2.4% on April 15, 2025, contributing to a 12% year-to-date decline, underscoring investor fears about the company’s exposure to the trade war.

China is a vital market for Boeing, expected to account for 20% of global aircraft demand over the next two decades, with Airbus forecasting 9,500 new deliveries to China by 2043. In 2018, nearly 25% of Boeing’s aircraft deliveries went to China, but trade tensions and internal issues, including the 2019 grounding of the 737 Max, have curtailed new orders. Boeing’s 2024 annual report warned of risks from “deterioration in geopolitical or trade relations,” noting that failure to deliver to China or secure future orders could reduce deliveries and market share.

Caught in the Crosshairs

Boeing’s plight is compounded by its existing challenges, including a mass workers’ strike, financial losses, and scrutiny following a 737 Max 9 door plug incident in January 2024. The trade war now threatens to erode its competitive position against Europe’s Airbus and China’s domestic manufacturer, COMAC. China’s top three airlines had planned to take delivery of 179 Boeing planes between 2025 and 2027—45 for Air China, 53 for China Eastern, and 81 for China Southern—deals worth billions now in jeopardy.

The halt on U.S. parts imports could also disrupt COMAC’s C919 and C909 programs, which rely on American components, but Chinese airlines may increasingly turn to Airbus or COMAC for new orders, further squeezing Boeing’s market share. Airbus, with manufacturing facilities in the U.S., is better positioned to absorb tariff-related costs and has already dominated Western airliner exports to China in recent years. Analyst Wouter Dewulf from the University of Antwerp noted that Boeing faces higher production expenses and reduced profit margins, as it struggles to pass on tariff-induced costs.

Global carriers are also reacting cautiously. Ryanair’s CEO, Michael O’Leary, told the Financial Times that the airline might delay Boeing deliveries if tariffs raise costs.

“We might delay them and hope that common sense will prevail,” he said.

Delta has similarly indicated potential delays, reflecting broader industry concerns about tariff-driven price hikes.

Goldman Sachs’ Optimism

Despite these challenges, Goldman Sachs analysts, led by Noah Poponak, argue that Boeing’s survival is not at stake, drawing parallels to China’s suspension of Boeing purchases during Trump’s first term (2017-2021). In a note to clients on April 15, 2025, Poponak wrote, “We think the impact to Boeing is very small because China had already stopped taking Boeing deliveries and stopped ordering Boeing aircraft during the last Trump administration, such that there is no real reduction to implement.”

During Trump’s first term, China imposed tariffs of 25% on U.S. goods, and Boeing deliveries to Chinese carriers were minimal, with the country grounding the 737 Max in 2019 after two fatal crashes. Since January 1, 2018, Chinese customers have ordered only 28 Boeing aircraft, representing just 2% of Boeing’s order backlog, which is sold out through 2030 with other customers. Approximately 25 737-8 MAX aircraft, produced before 2023, remain undelivered to China, but Goldman Sachs notes that Boeing can redirect these jets to other airlines, mitigating short-term financial impacts.

Goldman Sachs’ confidence stems from Boeing’s substantial order backlog, valued at $350 billion, and its ability to reallocate deliveries globally. The firm also points out that Airbus lacks the capacity to fully replace Boeing in China, limiting immediate competitive losses. While acknowledging long-term risks, such as reduced market share if China shifts to Airbus or COMAC, Goldman Sachs believes Boeing’s global demand and production flexibility provide a buffer against the current trade war’s effects.

Trump’s Stance and Potential Economic Impact

The U.S.-China tariff war, with trade valued at over $650 billion, risks a broader economic standstill, with Goldman Sachs estimating a 45% probability of a U.S. recession. Trump has framed his tariffs as a tool to curb drug trafficking and support domestic manufacturing, but his policies have sparked global market volatility, with the S&P 500 losing nearly $6 trillion in value over four days in early April 2025. On April 15, Trump wrote on Truth Social, stating that China “just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft,” though the specifics of the deal remain unclear.

China’s Foreign Ministry, through spokesman Lin Jian, emphasized a commitment to “handshakes rather than fist fights,” but its 125% tariffs and non-tariff measures, such as limiting Hollywood imports and slowing rare earth exports, signal a robust retaliatory stance. Some analysts, like international aviation consultant Neil Hansford, argue that China may suffer more, given its post-COVID aircraft shortage, but the immediate impact on Boeing is undeniable.

Boeing’s 36 suppliers in China, which produce components for all its current models, face disruptions from the parts import ban, potentially increasing production costs. While Goldman Sachs remains sanguine about Boeing’s short-term resilience, the long-term outlook depends on the duration and severity of the tariff war. A prolonged exclusion from China, which Boeing called a “significant market” in its 2024 report, could erode its competitive edge, especially as COMAC’s C919 gains traction.