Changes in China-US Trade Policies: Xiamen Airlines Sends Back Boeing 737 MAX; Boeing Seeks Malaysia Airlines to Take Over the Aircraft

Taiwan • Business • 04/21 15:02
Changes in China-US Trade Policies: Xiamen Airlines Sends Back Boeing 737 MAX; Boeing Seeks Malaysia Airlines to Take Over the Aircraft

In April 2025, changes in trade policies between China and the United States led to the return of two Boeing 737 MAX jets, originally scheduled for delivery to Xiamen Airlines, to Seattle, Washington. This move marked one of the first instances of "returned aircraft" amid the escalating trade war between China and the US. Boeing is negotiating a resale plan with Malaysia Airlines, indicating that the aviation manufacturing industry's long-standing reliance on a duty-free delivery system is facing challenges, and future aircraft delivery plans are filled with uncertainty.

Key Updates

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04/21 15:02

Changes in China-US Trade Policies: Xiamen Airlines Sends Back Boeing 737 MAX; Boeing Seeks Malaysia Airlines to Take Over the Aircraft

In April 2025, changes in trade policies between China and the United States led to the return of two Boeing 737 MAX jets, originally scheduled for delivery to Xiamen Airlines, to Seattle, Washington. This move marked one of the first instances of "returned aircraft" amid the escalating trade war between China and the US. Boeing is negotiating a resale plan with Malaysia Airlines, indicating that the aviation manufacturing industry's long-standing reliance on a duty-free delivery system is facing challenges, and future aircraft delivery plans are filled with uncertainty.

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Xiamen Airlines Confirms Return of Two 737 MAX Aircraft to the US

According to multiple media reports and flight tracking data, two Boeing 737 MAX aircraft originally scheduled for delivery to China's Xiamen Airlines took off from Boeing's completion center in Zhoushan, China, on April 20th and 21st. After refueling stops in Guam and Hawaii, they landed at Boeing's production base in Seattle, USA. Both aircraft have been painted, with one clearly displaying the Xiamen Airlines logo.

A spokesperson for Xiamen Airlines confirmed on April 21st that the two aircraft have indeed returned to the US but did not specify the reasons. Boeing has yet to make an official comment on the matter. According to reports from The Air Current and Reuters, these aircraft had completed most of the pre-delivery preparations, pending only final interior and testing procedures before official delivery.

US-China Tariff Policies Cause Delivery Suspension

The aircraft return incident occurred against the backdrop of US President Trump's announcement in early April to impose tariffs of up to 145% on Chinese imports. China quickly retaliated with a 125% tariff on US goods. Aviation consultancy IBA estimates that a 737 MAX, valued at approximately $55 million, would incur a tariff of $68.75 million if subjected to a 125% tariff, nearly exceeding the aircraft's value.

These tax burdens place significant pressure on airlines, especially with rising international oil prices and maintenance costs. Many Chinese airlines have opted to delay or cancel new aircraft deliveries. According to Bloomberg and CBS News, the Chinese government has instructed domestic airlines to suspend receiving Boeing aircraft and US aviation parts, affecting the delivery plans of at least 10 737 MAX aircraft.

Role of Boeing Zhoushan Completion Center Challenged

The Boeing Zhoushan Completion Center, a joint delivery base established by Boeing and China's COMAC, is tailored for the Chinese market, responsible for the final assembly and delivery of the 737 MAX model. The return of the two aircraft from Zhoushan represents a significant challenge to the long-relied "duty-free delivery" system in the aviation industry.

According to the You Analysis Industry Data Center, these two aircraft had completed most of the delivery process but were forced to halt the transaction due to policy changes, indicating that the global aviation supply chain's "separation of production and market locations" model is under pressure for restructuring.

Malaysia Airlines in Talks to Acquire Returned Aircraft

Despite obstacles in the Chinese market, Boeing has not given up on finding alternative buyers. Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, has confirmed that it is in talks with Boeing to take over the returned 737 MAX aircraft. MAG CEO Izham Ismail stated that if Chinese airlines stop receiving aircraft, the group hopes to secure the originally scheduled delivery slots to accelerate its fleet modernization plan.

MAG has currently ordered 18 737 MAX 8 and 12 737 MAX 10 aircraft and has signed a leasing agreement with Air Lease Corp, planning to receive 25 737 MAX aircraft between 2023 and 2026. If negotiations are successful, MAG will raise funds through capital markets to support additional fleet expansion.

Uncertain Future for Chinese Market Orders

According to Boeing's public data, 18 Boeing aircraft have been delivered to nine Chinese airlines by early 2025. However, China's three major airline groups—Air China, China Eastern Airlines, and China Southern Airlines—originally planned to receive nearly 180 Boeing aircraft between 2025 and 2027, but these orders now face high uncertainty.

Reuters pointed out that Boeing's efforts to recover in the Chinese market were already challenging. Since 2019, China had frozen imports of the 737 MAX due to two fatal crashes, only gradually lifting the ban in recent years. The recent trade policy changes pose a new round of impact on Boeing's business in China.

Rising Risks of Delivery Delays and Production Line Adjustments

Executives from several airlines have stated that in the face of high tariffs, they would rather delay receiving aircraft than bear the additional costs. This forces Boeing to readjust its production lines and delivery plans and seek other markets to absorb the aircraft originally produced for Chinese customers.

According to Business Insider and Deutsche Welle, several 737 MAX aircraft are currently parked in Zhoushan awaiting delivery, and whether they will also return to the US remains to be seen. Boeing's competitors in the Asian market, such as Airbus and local Chinese manufacturers, are actively vying for regional orders, potentially altering the market landscape.

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