China may drop Boeing 737 MAX from trade deal with US
- Safety concerns after Ethiopian Airlines crash mean the planes may be taken off draft list of American products China would buy to reduce trade surplus
- Such a move could delay any overall agreement between the two countries
China is looking at excluding Boeing Co.’s troubled 737 MAX jet from a list of American exports it would buy as part of a trade deal with the US, people familiar with the matter said.
Boeing planes were featured on a draft list of American products China would buy to reduce its trade surplus with the US, the sources said, asking not to be identified discussing private deliberations. Now, safety concerns are pushing China to examine whether to cut the 737 MAX from the list altogether or replace it with other Boeing models after the crash of a plane operated by Ethiopian Airlines led to the aircraft being grounded worldwide, they said.
A reduction in aircraft purchases could make it harder for China to fulfil an offer it is said to have made to pare down its US$300-billion-plus annual goods trade surplus with the US over six years, and potentially delay any overall agreement between the two countries. Worth billions of dollars and a key US export, planes would likely be a key component of any commitment by China to buy more American goods, along with soybeans, meat and natural gas.
China’s Ministry of Commerce, which is in charge of the nation’s trade talks with the US, did not immediately respond to a request for comment. A Boeing representative declined to comment.
Boeing rose less than 1 per cent to US$373.96 when trading closed at 4pm in New York. The company’s market value has tumbled about US$27 billion since the Ethiopian Airlines crash.
For Boeing, China’s exclusion of MAX purchases in a trade deal would mark another setback for a company that is reeling from a crisis of confidence over its top-selling plane, which accounts for almost a third of its operating profit.
