Is Boeing in the Crossfire Amid Intensified US-China Trade War?

China has been exerting economic pressure on the United States, of late, in response to Trump’s decision earlier this year to impose higher tariffs on Chinese imports. A recent escalation in this trade war between the globe’s two largest economies has put Boeing (BA) in the crossfire.

Notably, in October 2025, China expanded export controls to cover five additional rare earth metals in addition to the initial seven restricted earlier this year. In a sharp response, U.S. President Donald Trump announced that America is considering imposing export controls on Boeing aircraft parts destined for China. This announcement has placed the American aerospace giant squarely in the middle of a geopolitical standoff.

While imposing export controls on Boeing aircraft parts may put China in jeopardy and hurt the smooth operations of the 1,855 Boeing airplanes currently in service in the nation (as per CNBC), the situation is precarious for Boeing as well.

Notably, Chinese airlines currently have firm orders for 222 Boeing aircraft that are still awaiting delivery. So, if China refuses to take deliveries from Boeing, as it did in April 2025, in light of the fresh trade tension, it will hurt Boeing’s revenue generation prospects for its commercial airplane business, apart from pushing up its inventory costs.

The jet giant is also reportedly in negotiations for a major deal involving up to 500 jets in China, which may go south, considering the current market situation.

Will Boeing’s Peers Benefit?

Trump's trade tactic of imposing export controls on Boeing aircraft parts to keep China under pressure, if implemented in reality, might potentially push Chinese airlines to look for other jet makers and thereby prove beneficial for Boeing’s arch rival Airbus (EADSY).

Notably, Airbus already has an established footprint in China’s commercial aerospace market, which has become the largest single-country market for the European jet giant worldwide. To date, Airbus' in-service fleet in the Chinese mainland has reached over 2,200 aircraft with some 55% market share in mainland China.

Another jet maker that may benefit from the current market situation is Embraer (ERJ). Although the scale of operations in commercial aerospace for this Brazilian aerospace company is not in line with Boeing or Airbus, it has been making significant efforts to increase its footprint in China, realizing the growth prospects of this nation’s commercial aerospace industry. With this aim in view, ERJ participated in last year’s Airshow China with a special focus on collaboration opportunities with the supply chain in China.

Notably, Embraer’s E190-E2 and E195-E2 jets are currently certified by the Chinese civil aviation for flight, with the company having established a comprehensive after-sales service system to support the E-Jets fleet in China, including authorized maintenance centers, spare parts warehouses and a complete pilot training network.

The Zacks Rundown for BA

Shares of Boeing have risen 35.1% in the past year compared with the industry’s growth of 11.2%.

From a valuation standpoint, BA is currently trading at a forward 12-month sales of 1.73X, a discount when stacked up with the industry average of 2.36X.

The Zacks Consensus Estimates for BA’s near-term earnings (except for 2026) have moved south over the past 60 days.

BA stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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