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Boeing (BA+2.21%) stock was down slightly after the market opened on Tuesday after a report surfaced that the company is suffering a blow in the U.S. trade war.
Chinese airlines have been ordered not to accept any more deliveries from the Seattle-based plane manufacturer, Bloomberg reported Tuesday, citing unnamed people familiar with the matter. The Chinese government also asked its airlines to halt purchases of aircraft-related equipment and parts manufactured by U.S. companies.
Boeing shares slipped 2.2% just after Tuesday’s market open after being down as much as 4.6% in premarket trading Tuesday.
The move is part of China’s retaliation in the trade war initiated by President Donald Trump’s tariffs. The U.S. has slapped Chinese imports with tariffs as high as 145%. In response, China installed its own 125% tariffs on U.S. imports.
About 10 Boeing 737 Max aircraft are close to entering Chinese airlines fleets, Bloomberg reported, citing data from Aviation Flights Group. That includes two planes each for China Southern Airlines Co., Air China Ltd. (AIRYY0.00%), and Xiamen Airlines Co. Delivery paperwork might have been completed before China’s tariffs on American goods took effect on April 12, in which case they might be allowed to enter the fleet on a case by case basis, according to the report.
Beijing is also looking into ways to assist Chinese airlines that are facing higher costs because they lease Boeing jets, Bloomberg reported.
Whether Trump’s tariffs on China will stay in place remains to be seen. On Monday, the president said during comments at the White House that he was “flexible” when it came to possible exemptions on Apple (AAPL+2.21%) goods manufactured in China. He struck a similar tone when asked about auto imports from Canada and Mexico.
Boeing’s stock is down 9.2% this year.