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June 13, 2024

Airbus Faces Headwinds Amid EU-China Trade Tensions

Airbus, the European aerospace giant, is grappling with the escalating trade tensions that have intensified following the European Commission’s decision to impose additional tariffs on Chinese electric vehicles. This move mirrors the United States’ stance and has created ripples across global trade dynamics.

In response to queries regarding the European Commission’s decision to levy extra duties of up to 38.1% on Chinese electric vehicles, a spokesperson for Airbus refrained from commenting directly on the measure. Instead, they underscored the broader challenges that trade tensions pose to multinational corporations like Airbus.

“We are witnessing a rise in trade tensions worldwide, which tests the resilience of global companies such as Airbus,” the spokesperson stated in an emailed communication. “Our customer base is global. Trade tariffs add layers of complexity and cost to our supply chain, to Airbus, and to our customers.”

This sentiment comes at a crucial juncture for Airbus, which has been engaged in negotiations with China regarding a significant potential order for aircraft. In April, Reuters reported that Airbus was in discussions with Chinese authorities for a historic deal potentially involving 600 to 750 aircraft. However, analysts caution that large orders from China’s state buying agency often blend new business with repeat orders, and the timing of such announcements can fluctuate with the state of trade relations.

The European Union’s decision has not gone unnoticed in Beijing. Chinese foreign ministry spokesperson Lin Jian remarked that the EU’s actions would harm China-EU economic cooperation, signaling potential strain in bilateral relations. A third industry insider, speaking post-EU announcement, suggested that the likelihood of an imminent aircraft sale to China seemed increasingly uncertain against the backdrop of the trade dispute and political instability in Europe.

Despite the mounting pressures, Airbus has maintained a policy of not commenting on ongoing aircraft negotiations. Meanwhile, China’s CASC state buying agency was not available for comment outside of regular business hours in Beijing.

Adding to the complexity, Bloomberg News recently reported that Airbus was negotiating an order for 100 wide-body planes from China. Historically, China has balanced its aircraft imports between Airbus and its American competitor, Boeing. However, in recent years, Chinese orders for Boeing planes have dwindled, coinciding with strained China-US relations.

The current trade tensions place Airbus in a delicate position. The company’s extensive global supply chain and customer base mean that any increase in tariffs and trade barriers directly impacts operational costs and logistics. As global trade dynamics continue to evolve, Airbus and similar multinational corporations must navigate these challenges to sustain their business and market positions.

The ongoing situation underscores the intricate interplay between global trade policies and corporate strategy. For Airbus, maintaining its leadership in the aerospace industry will require agile responses to the shifting landscape of international trade and economic diplomacy. As the situation develops, the aerospace community and broader business world will be closely watching how Airbus maneuvers through these turbulent times.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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