Shares of U.S. aerospace giant Boeing tumbled in extended-hours trading Wednesday as investors digested the impact of new Chinese tariffs.
Beijing has announced brand-new tariffs on 106 U.S. products which have also hit automakers and whiskey producers. China’s move is viewed as a response to President Trump’s list of Chinese imports that the U.S. is taking aim at.
Boeing’s share value fell 6 percent by about 7.00 a.m. ET Wednesday in extended-hours trade. Its big rival Airbus is also lower but is managing to outperform the wider French index.
The effective start date for the new charges is not known, but China’s Ministry of Commerce said the tariffs are designed to target up to $50 billion of U.S. products annually.
Boeing shares have been weighed down in recent weeks as talk has persisted of a potential trade war between the U.S. and China.
But in a note released prior to China’s latest announcement, stock researchers Valuentum suggested that Boeing’s tariff troubles were overblown.
“Even if there are some commercial airplane cancellations from China-based airlines, Boeing has tremendous flexibility to pull forward deliveries from other customers,” the note said Tuesday.
Boeing has estimated that customers across the globe will demand more than 41,000 new airplanes over the next two decades.
Much of that demand will stem from a China that is hungry for new planes. Last week, Flight Global reported that the China Southern Airlines Group is scheduled to take delivery of 309 aircraft over the next three years.
In 2018, Boeing is set to deliver 71 aircraft to the group. So far there has been no suggestion that this deal is at risk.