The Boeing 737 Max fiasco could affect trade negotiations between China and the U.S., sources close to the matter revealed. It could delay the highly-anticipated deal and potentially have the jet manufacturer excluded from the overall agreement.
According to Bloomberg, the draft list suggesting which products China should buy from the United States included Boeing jets. With two crashes looming above the world's largest jet manufacturer, Chinese officials are reportedly reconsidering if the Asian country would purchase Boeing jetliners.
Sources with knowledge of the situation, on condition of anonymity, revealed that safety concerns are the main factors that could hamper the ongoing trade negotiations between China and the U.S. Beijing is said to be deliberating whether the 737 Max models will be removed from the list of products altogether or if the jetliners could be replaced with other models from the American provider.
Industry analysts pointed out that if China reduces its aircraft purchases from the U.S., the former may have a hard time fulfilling its promised quota to U.S. President Donald Trump's administration. Jetliners are a key driver in American exports and experts indicated that China's commitment to these products may cause a rift in the overall purchase agreement.
China's reconsideration of Boeing 737 Max purchases stemmed from the recent Ethiopian Airlines crash that killed 157 people. Since the crash, the American jet manufacturer's market value dropped by about $28 billion.
Furthermore, two sources implied that Beijing's delegation for the high-end trade talks have shifted their stance as Washington failed to reassure China that tariffs will be lifted from Chinese products. Both sides have yet to release a statement on the issue.
It is expected that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will be traveling to China during the week of March 25 to discuss the trade deal. China's Vice Premier Liu He, as part of the negotiations, is said to travel to Washington sometime early April.
Meanwhile, Washington reportedly ordered a review of the Boeing 737 Max model's license to fly following a surge in concerns about the jetliner's safety. According to BBC News, investigative suggestions that there were "clear similarities" between the Lion Air crash in October and the recent Ethiopian Airlines disaster resulted in the probe.
Transport Secretary Elaine Chao sent a memo to Inspector General Calvin Scovel, stating that the aircraft's certification review will be made to "assist the Federal Aviation Administration [the regulator] in ensuring that its safety procedures are implemented effectively."
