The logo of Boeing (BA) is seen in Los Angeles. Photoe: Reuters
Photo: Reuters

Beijing is not particularly keen on making big orders for Boeing’s 737 Max jets, reports suggest, a fact not surprising after the two crashes of the model in recent months.

Preliminary information from an ongoing investigation into the crash last week of an Ethiopian Airlines Max aircraft has fueled speculation that design flaws, faulty software and the withholding of information led to both recent crashes.

While customers already waiting for their orders might be inclined to see whether Boeing can provide a satisfactory fix, the expectation that China would include big purchases of the jet in a trade deal with the Trump administration is now in question.

Aircraft are one of the biggest-ticket items among US exports to China, making aviation one of the few areas where Beijing can demonstrate a good-faith effort to reduce the bilateral trade balance. That aspect of the trade dispute had been seen as one of the most straightforward from the standpoint of selling a deal.

Headline numbers touting China’s increased purchases can be marketed easily to the voting public in the US, playing into President Donald Trump’s political priorities, regardless of whether or not the deals would change the long-term trajectory of a trade deficit.

In the long term, China is keen to see its domestically produced Comac C919 substitute for Boeing and Airbus alternatives.

Selling more jets from Boeing is also one of the few avenues for the Trump administration to further its priority of promoting US manufacturing in any deal. The other items on the table that have been leaked from early drafts of the US-China trade agreement currently being crafted mainly consist of commodities.

Shares of Boeing have fallen as much as 14% since the Ethiopian Airlines crash.

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