By Lisa Barrington, Sophie Yu, Dan Catchpole and Tim Hepher
(Reuters) -A Boeing jet earmarked for China was returning to the United States on Friday, flight tracking data showed, as the planemaker’s flagship delivery plant outside Shanghai was drawn into a deepening tariff war between Beijing and Washington.
The return of one of several jets waiting for final work and handover to a Chinese carrier at the completion centre in Zhoushan is the latest sign of disruption to deliveries from a breakdown in the industry’s decades-old duty-free status.
In a sign that Boeing was preparing for normal business just weeks before U.S. President Donald Trump announced tariffs on April 2, three new 737 MAX planes had flown from Boeing in Seattle to Zhoushan in March.
Another arrived last week at Zhoushan, where Boeing installs interiors and paints liveries before handing over to customers, according to Flightradar24 data.
But on Friday, one of the first batch of jets took off again without being delivered and flew from Zhoushan to the U.S. territory of Guam – one of the stops such flights make as they cross the Pacific – indicating it was heading back to Seattle.
Boeing declined to comment.
The 5,000-mile trip back to Boeing’s main factory comes as the planemaker’s business in China is under scrutiny over the tariff dispute.
Bloomberg News reported earlier this week that Boeing faced a Chinese ban on imports, part of the escalating confrontation over President Trump’s “reciprocal” global tariffs.
There has been no official comment from Beijing, or in Chinese state media.
Senior aviation and aerospace industry sources told Reuters they were not aware of formal instructions against taking Boeing planes.
Even so, industry sources and analysts widely agreed that the imposition of tariffs on U.S. goods by Beijing in response to Trump’s actions would effectively block aircraft imports without any formal ban.
One senior industry source said Boeing and suppliers were planning on the basis that it would not be delivering planes to China for the time being.
Photos posted to plane-spotting websites in February showed that the repatriated plane was decorated with a livery for Xiamen Airlines, majority owned by China Southern.
One source said it was expected to be delivered to Xiamen, which did not reply to a request for comment.
Aviation publication The Air Current, which first reported the decision to withdraw some undelivered jets from Zhoushan, said one unnamed Chinese airline had separately walked away from a commitment to lease a Boeing aircraft.
Industry sources said the return flight came despite some discussions over leaving undelivered jets in bonded storage, meaning they would not be officially imported or tariffed.
Chinese customs did not reply to a request for comment.
DELIVERY LIMBO
The tariff war and apparent U-turn over deliveries comes as Boeing has been recovering from an almost five-year import freeze on 737 MAX jets and a previous round of trade tensions.
Boeing opened the completion plant in Zhoushan – a major cargo hub which together with nearby Ningbo hosts one of the world’s busiest ports – in 2018 under the shadow of a previous round of trade tensions during Trump’s first presidency.
Although Boeing has not followed Airbus in assembling full airplanes in China, analysts said the aim was to build a lead in one of the world’s largest air travel markets.
Bloomberg News also reported that Beijing has asked that Chinese carriers halt purchases of U.S.-made aircraft parts. All modern commercial jets depend heavily on such components.
Two U.S. industry sources said they were given no clear instructions not to ship parts to China. A separate source, who runs a maintenance and repair shop for aircraft in China, said they had not had any issues importing American parts.
China’s foreign ministry declined to comment.
Asked by media about the reported bans, a spokesperson said: “I’d refer you to competent authorities”.
Confusion over changing tariffs could leave many aircraft deliveries in limbo, with some airline CEOs saying they would defer delivery of planes rather than pay duties, analysts say.
Boeing historically sent a quarter of its deliveries to China but this has been falling following earlier tensions, a 737 MAX safety crisis and the impact of the COVID-19 pandemic.
Boeing data shows 130 unfilled orders for China-based airlines and lessors. Industry sources say a significant portion of the more than 760 unfilled orders for which Boeing has yet to name a buyer are destined for China.
Analysts said a short-term halt in deliveries to China would not have an immediate major impact on Boeing, since it could serve other airlines and Airbus lacks spare capacity.
(Reporting by Lisa Barrington, Sophie Yu, Dan Catchpole and Allison Lampert; Writing by Lisa Barrington and Tim Hepher; Editing by David Evans, Jamie Freed and Emelia Sithole-Matarise)
