Jet weight puzzle to determine tariff impact on Boeing

SINGAPORE/ SHANGHAI: China announced plans to place a 25 per cent tariff on certain US aircraft, in a move expected to affect some older Boeing narrowbody models, according to documents from China’s Ministry of Commerce and the US manufacturer.

But although several analysts said China had spared the newer 737 MAX – key to future Boeing profits – the impact remained uncertain because of a lack of detail in the announcement and the fact that not all airplane characteristics are published.

Boeing shares fell as much as 6 per cent after China hit back at US tariffs with the announcement of duties on key US imports including soybeans, cars, beef and chemicals, as well as planes.

These include aircraft with an ‘empty weight’ of between 15,000 kilograms and 45,000 kilograms, or 15 to 45 tonnes.

Depending on how ‘ empty weight’ is defined, this leaves a question mark over the fate of Boeing’s new big-selling 737 MAX 8 jet – though the larger MAX 9 and MAX 10 could be spared.

The stakes are high. The United States exported US$15 billion of aircraft to China in 2016, ranking equally with agricultural products like soybeans as the biggest category of goods.

Several definitions of ‘empty weight’ are used in the aircraft industry and the ministry document gave no explanation.

Two industry experts said the rules most likely refer to the “manufacturer’s empty weight,” or the core aircraft structure.

But manufacturers are usually shy about publishing this number because of its commercial sensitivity, while they do give estimates for the slightly higher “operating empty weight,” which includes airline crew and some equipment, but not fuel. — Reuters