Boeing 737 MAX first victim of US-China tariff wars

The first major fallout of the tariff war set off by US President Donald Trump, and the retaliatory tariffs by countries like China, was displayed in a Boeing 737 MAX, the latest model favoured by airlines, had returned from China to the factory centre in eastern United States.

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Both Boeing officials and the Xiamen Airlines did not speak to the media. But it was evident that the plane and many like it which are ready to be delivered to the customers – the airlines – are caught up in the crossfire of tariffs declared by each country.

President Trump had raised tariffs on Chinese imports to 145 per cent. China hit back with tariffs of 125 per cent. This means that Xiamen airlines would have to pay 125 per cent import duty on the basic price of the passenger plane which is $55 million. That would have a crippling impact on the airline’s finances.

And unable to dispose of the plane fitted specially for the private Chinese airline, Boeing would be incurring a huge loss. It can be said that Boeing could sell the 737 MAX to another airline. But this is not easily done. It is not the case of a small plane because an airline orders the model for a fleet.