China has removed its ban on airlines accepting Boeing planes after Beijing and Washington agreed to temporarily reduce the steep tariffs on one another, according to a report.
Officials in China have begun notifying domestic carriers and government agencies this week that they may resume deliveries of aircraft produced in the U.S., Bloomberg News reported, citing sources familiar with the matter.
Last month, at least three jets at Boeing’s delivery center in China were returned to the U.S. Boeing said customers in China would not accept delivery of new planes in response to tariffs imposed by the Trump administration. Because of this, the planemaker said it was seeking to resell potentially dozens of aircraft.
US, CHINA REDUCED TARIFFS FOR 90 DAYS AFTER TRADE TALKS
On Monday, China and the U.S. agreed to cut reciprocal tariffs by 115% for 90 days while officials continue to negotiate a trade deal. The two countries with the world’s biggest economies had been involved in a trade war in recent weeks.
Two weeks ago, Beijing said Chinese airlines and Boeing had been severely impacted by tariffs imposed by the Trump administration.
China had already granted exemptions from the soaring tariffs to some aerospace equipment parts, including engines and landing gear, before Monday’s agreement.
CHINA BEGINS RETURNING BOEING AIRCRAFT TO US
China represents about 10% of Boeing’s commercial backlog, and it is an important and growing aviation market.
Boeing executives said during the company’s first-quarter earnings call that the company had planned to send 50 jets to Chinese carriers this year, including 41 in production or pre-built.
Despite Boeing saying other airlines are interested in the rejected planes, the planemaker has hesitated to send the jets elsewhere even though it wants to cut down its high inventory levels.
Seating was one obstacle since they were chosen and purchased by the Chinese airlines.
Chinese customers are expected to accept 25 out of 30 remaining 737 MAX jets built before 2023 that have not yet been delivered, according to Boeing.
At least four 777 freighter planes are also in production for Chinese carriers, according to a source familiar with the matter and aircraft tracking database Aviation Flights Group.
Reuters contributed to this report.
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