Will Boeing's 737 Ground US-China Trade Talks?

♠ Posted by Emmanuel in , at 3/20/2019 05:19:00 PM
The only thing being "maxed" around here are US-China trade tensions.
It's a major embarrassment for the mainstay product of the United States' largest exporter of manufactures to be grounded worldwide. Remember, though, that Chinese aviation authorities were among the first to do so. Boeing's workhorse model, the 737, has had teething problems with the rollout of its latest edition, the Max 8 and 9. Worse still, the two recent crashes of the plane appear to have been caused by similar factors, shifting the likelihood of blame away from pilot error to the software of the plane.

Now, we learn that not only is the Boeing 737 Max a global aviation concern, but also one that could ground US-China trade talks. You see, one of the quicker ways to "bridge" the enormous US-China trade imbalance is for the PRC to buy big-ticket items, and few come more expensive than state-of-the-art jetliners. Unfortunately, though, the Chinese understandably balking at purchasing more 737s--these are meant more for the domestic market--may cause wider damage to trade negotiations:
China’s move to ground Boeing Co’s 737 MAX jetliners following the deadly Ethiopian Airlines crash has cast a shadow over the American planemaker’s immediate hopes for a major jet order linked to a U.S.-China trade deal, industry sources said...

Evidence of a major potential order for more than 100 jets worth well over $10 billion at list prices had risen in recent weeks as Washington and Beijing reported some progress in trade talks to resolve a months-long trade war.

Those expectations were fanned by signs of pent-up demand stemming not only from a drop in China’s public purchases as the two sides descended into a tariff war, but also because China placed no private orders for Boeing aircraft in 2018, according to trade and industry sources familiar with the matter. Now, those sources say it is uncertain how quickly China will be willing to give the 737 MAX the expected new endorsement after ordering its own airlines to stop flying the jet
Also keep in mind that the Chinese are busy rolling out their own Boeing 737 / Airbus A320 competitor, the COMAC C919. To burnish its reputation for safety, especially among PRC nationals, it may be worth denigrating the Boeing 737 as unsafe such as by canceling orders originally meant to appease the trade-crazed Donald Trump:
China may now see an opening to establish itself as more of a leader in the aerospace industry, having already embarrassed the Federal Aviation Administration by leading a global charge to ground the Max that left the U.S. regulator isolated in its defense of the plane’s airworthiness and nearly the last of its brethren to temporarily ban the jet from commercial flight. China may be wont to relinquish its newfound role as a champion of safety, particularly as Comac prepares to drive a wedge in the Boeing-Airbus duopoly with the roll-out of its C919 in 2021. China says the plane — which can fit up to 168 passengers, similar to the Max 8 plane implicated in the crashes — has more than 800 orders worldwide.
In any event, this latest brouhaha over the 737 Max surely does not look like it's helping to bring current trade talks to a successful conclusion. After all, what else big-ticket goods are still made in the USA that the Chinese would buy lots and lots of?