China: One Boeing aircraft finds a loophole in tariffs
China’s proposed aircraft tariffs take aim at Boeing’s main source of profit, the 737 jetliner family, while exempting a popular upgraded model needed to fuel the rapid growth of the country’s airlines. Boeing’s best-selling plane, the 737 Max 8, would narrowly escape the retaliatory measure, based on the weight limits outlined by the Chinese government, Douglas Harned, an analyst at Sanford C. Bernstein & Co., said Wednesday. The biggest risk is for an older generation of 737 jetliners and General Dynamics Corp.’s luxurious Gulfstream jets. The threat goes beyond particular aircraft models. Even if commercial aircraft deliveries continue largely as planned to China, there’s still the risk that the escalating tit-for-tat between the world’s two largest economies would spiral into global recession. The measure was a “shot across the bow” for Boeing and the US government, said Seth Seifman, aerospace analyst at JPMorgan Chase & Co. “We understand some big picture concern,” Seifman said in a report, “but it appears to us that the specific proposals from China this morning are calibrated carefully to avoid a major impact on Boeing and are therefore intended more as a message to the US administration that additional trade barriers will be met with an escalating response.” The proposed aircraft tariffs would apply to imported US aircraft weighing between 15,000 and 45,000 kilograms. That would mainly hit the so-called NG generation of 737 planes, which are being replaced by the Max. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2018-04-09/general/china-one-boeing-aircraft-finds-a-loophole-in-tariffs
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China: One Boeing aircraft finds a loophole in tariffs
China’s proposed aircraft tariffs take aim at Boeing’s main source of profit, the 737 jetliner family, while exempting a popular upgraded model needed to fuel the rapid growth of the country’s airlines. Boeing’s best-selling plane, the 737 Max 8, would narrowly escape the retaliatory measure, based on the weight limits outlined by the Chinese government, Douglas Harned, an analyst at Sanford C. Bernstein & Co., said Wednesday. The biggest risk is for an older generation of 737 jetliners and General Dynamics Corp.’s luxurious Gulfstream jets. The threat goes beyond particular aircraft models. Even if commercial aircraft deliveries continue largely as planned to China, there’s still the risk that the escalating tit-for-tat between the world’s two largest economies would spiral into global recession. The measure was a “shot across the bow” for Boeing and the US government, said Seth Seifman, aerospace analyst at JPMorgan Chase & Co. “We understand some big picture concern,” Seifman said in a report, “but it appears to us that the specific proposals from China this morning are calibrated carefully to avoid a major impact on Boeing and are therefore intended more as a message to the US administration that additional trade barriers will be met with an escalating response.” The proposed aircraft tariffs would apply to imported US aircraft weighing between 15,000 and 45,000 kilograms. That would mainly hit the so-called NG generation of 737 planes, which are being replaced by the Max. <br/>
