SINGAPORE: It is astonishing how fast a brand can fall from grace.

Boeing was once the world’s largest planemaker, pipping its archrival Airbus with 806 commercial aircraft deliveries to 800 in 2018. In 2017, Boeing delivered 763 jets while Airbus delivered 718.

All that changed in March 2019. Two fatal crashes involving Boeing’s 737 MAX aircraft, killing 346 people in the space of five months, forced the aircraft type to be grounded between March 2019 and November 2020 by the US Federal Aviation Administration.

The MAX was grounded again in 2024, after a door plug of an Alaska Airlines’ new 737 MAX blew out midair in January of that year.

Fast forward to April this year, when US President Donald Trump introduced a slew of tariffs, with the most punishing ones reserved for China.

On Apr 15, Beijing instructed its airlines not to take deliveries of Boeing planes, including those already built, in response to the US decision to impose tariffs of up to 245 per cent on China.

China also ordered Commercial Aircraft Corporation of China (COMAC) to stop buying parts from US suppliers, an odd decision as COMAC sources over 40 per cent of parts from the US and Europe for its aircraft.

These developments were yet another blow for Boeing, which had previously projected brisk business in China. In August 2024, Boeing’s vice-president of commercial marketing Darren Hulst remarked, “China’s airlines will see strong demand, requiring further growth of their modern fuel-efficient fleets.”

Indeed, Boeing’s Commercial Market Outlook for China projected the country will need 8,830 new planes by 2043 and its commercial fleet will grow 4.1 per cent annually over the next two decades.

RETALIATE, NEGOTIATE OR CAPITULATE?

While Western observers felt China’s drastic decision to suspend purchases from American planemakers would be a self-inflicted wound, the Chinese begged to differ.

People familiar with COMAC and the Civil Aviation Administration of China said the Chinese had anticipated Mr Trump’s moves when he won the elections last November.

“We knew tariffs were coming, there are plans B, C, D and so on,” an official told me. “We saw what happened to the Russians following sanctions (after the Ukraine invasion in 2022) and prepared accordingly.”

As a result of sanctions, Russian airlines and planemakers were unable to access replacement parts for its jets and were forced to ground aircraft.

While COMAC may not have publicly conceded to amassing foreign aircraft parts in the past two years, a source in Shanghai, where COMAC is based, suggested there is enough material to “make hundreds of aircraft in the next few years”.

COMAC is believed to have stockpiled at least 1,000 LEAP engines, specifically the LEAP-1C, which powers the C919, a single-aisle jet that competes directly with Airbus’ A320neo and Boeing’s 737 MAX.

The engine is co-produced by America’s GE and France’s Safran. The Airbus A320neo uses a similar engine, the LEAP-1A, while the B737 MAX is fitted with a LEAP-1B engine.

However, the engines used by the A320 and B737 MAX cannot be used by the C919; the LEAP-1C was designed exclusively for the COMAC jet.

An industry source told me that Chinese airlines have no qualms in suspending deliveries: “China must resist the US or it will take us for granted in future. While we do not blame Boeing (for the tariff war), this is no longer about trade. It is about sovereignty and dignity.”

The US and China agreed to reduce tariffs for 90 days on May 12, causing Boeing’s stock to rally to its highest price seen in over a year. On May 13, China reportedly reversed the ban on Boeing deliveries.

A source close to China’s regulator confirmed this, saying the decision was “in the best interest of both sides”.

While these are positive developments, the damage done by an uncertain tariff and regulatory environment may be lasting. It will also prompt COMAC to hasten its domestic aviation manufacturing goals to completely wean itself of Western dependence.

LOUD THUNDER, SMALL RAINDROPS

Prior to the US-China tariff pause, Boeing CEO Kelly Ortberg indicated the trade war was a fluid situation and that the company was planning to remarket the 50 jets that China did not plan to take.

“We have many customers who want near-term deliveries,” Mr Ortberg said, possibly alluding to Asia Pacific airlines such as Malaysia Airlines and Air India, which expressed a desire to buy those jets.

Tensions created by Mr Trump’s tariffs pose real risks not just to Boeing but to COMAC.

For one, Boeing will need to temper its market outlook for China. Even if there is a rapprochement in future, the international aviation landscape would have changed permanently.

Boeing’s stock is benefitting from the latest detente but this is a blip. In the long run the company must change its culture and, more importantly, its values.

COMAC, too, will not come out of this trade schism unscathed although the Chinese believe they have the edge.

COMAC’s planes have not sold well internationally, partly due to lack of certification by US and European regulators and partly because there remains a stigma for China-built commercial jets.

The Chinese, however, are steadfast and will persevere. An airline analyst in Beijing remarked: "We have a saying, 'loud thunder, small raindrops'. The Americans can shout all they want. This will hurt us less than them."

In his book Dealing With China, former US treasury secretary Henry Paulson wrote: “Facts, not wishes or dreams, should direct our dealings (with China). China is very different from the US and we cannot be guided only by the understandable desire that it become more like us.”

Perhaps Boeing’s CEO should make a call to Mr Paulson.

Shukor Yusof is the founder of Endau Analytics, an independent aviation advisory firm based in Singapore.