Boeing Co. (NYSE: BA) shares tumbled 7.2% in pre-market trading after China retaliated against U.S. tariffs, announcing sweeping tariff duties on key U.S. imports including an additional 25% tariff on U.S. aircraft.
The Chinese throttle on Boeing is likely to give the US aerospace giant’s European rival Airbus SE (EPA:AIR) a leg-up in the Chinese market, which is set to overtake the U.S. as the largest air travel market in the next five years.
None of the tariffs take effect immediately
The Trump administration on Tuesday threatened to slap sharp tariffs on some US$50bn in Chinese imports across 1,300 categories of products, including everything from dishwashers to televisions.
The aggressive move from the Trump administration provoked China to announce a planned levy on aircraft weighing between 15,000 kilograms (33,000 pounds) and 45,000 kilograms, which would include some variants of Boeing’s 737 family of passenger jets.
Even as markets brace for the US-China dogfight, none of the tariffs goes into effect immediately and may never be imposed if the two sides eventually agree on a deal to open the closed Chinese market to U.S imports.
Boeing, a component of the Dow Jones Industrial Average, was weighing on the index's futures in premarket trading, indicating a rout in U.S. market when the bell rings.