The Gulfstream G550 and G650, as well as the Boeing Business Jet BBJ1, are ensnared in 25-percent aircraft import tariffs imposed today by China as a result of an escalating tit-for-tat trade war with the U.S. It’s unclear if these tariffs are an increase of, or are in addition to, China’s existing 22-percent import tariff on business aircraft.
Aircraft with “unladen weights” (i.e. basic empty weights) between 15,000 kg/33,069 pounds and 45,000 kg/99,208 pounds are included in China’s latest tariff list that covers $50 billion worth of imports. Basic empty weights for the Gulfstream G550 and G650 are approximately 21,546 kg/47,500 pounds and 24,131 kg/53,200 pounds, respectively. The BBJ1 is near the top of the tariff range, with a BEW of 44,334 kg/97,740 pounds. No other FAA-certified, U.S.-manufactured business aircraft appear to fall within this range.
Citi defense and aerospace researcher Jonathan Raviv expects these tariffs to have only a limited effect on Gulfstream, as the bulk of its sales are in North America and Europe. “The bizjet rebound has never been prefaced in China, nor should it; there are other structural impediments, and the Chinese bizjet market has disappointed for years,” he said. “China has been a modest tailwind for Gulfstream lately. This tariff talk could simply further push back the China opportunity.”
The Gulfstream G550 and G650, as well as the Boeing Business Jet BBJ1, are ensnared in 25-percent aircraft import tariffs imposed early this month by China as a result of an escalating tit-for-tat trade war with the U.S. It’s unclear if these tariffs are an increase of, or are in addition to, China’s existing 22-percent import tariff on business aircraft.
Aircraft with “unladen weights” (i.e. basic empty weights) between 15,000 kg/33,069 pounds and 45,000 kg/99,208 pounds are included in China’s latest tariff list that covers $50 billion worth of imports. Basic empty weights for the Gulfstream G550 and G650 are approximately 21,546 kg/47,500 pounds and 24,131 kg/53,200 pounds, respectively. The BBJ1 is near the top of the tariff range, with a BEW of 44,334 kg/97,740 pounds. No other FAA-certified, U.S.-manufactured business aircraft appear to fall within this range.
Citi defense and aerospace researcher Jonathan Raviv expects these tariffs to have only a limited effect on Gulfstream, as the bulk of its sales are in North America and Europe. “The bizjet rebound has never been prefaced in China, nor should it; there are other structural impediments, and the Chinese bizjet market has disappointed for years,” he said. “China has been a modest tailwind for Gulfstream lately. This tariff talk could simply further push back the China opportunity.”
The day after the announcement the Asian Business Aviation Association (AsBAA) expressed concern about potential consequences of what appears to be a growing trade dispute. “The newly proposed tariff announcements may affect a certain weight category of business jet aircraft being imported into China,” AsBAA chair Jenny Lau wrote in a memo to members. “This could influence buyers' decision making, having an effect on manufacturers and the wider business aviation industry, although it is too early to predict the magnitude of any potential impact.”
The Aerospace Industries Association has warned about potential increased costs U.S. aerospace manufacturers will face as a result of U.S. tariffs on steel and aluminum. The Chinese tariffs, meanwhile, could hit Gulfstream and Boeing Business Jet sales.
Lau noted that the tariffs not only could affect business jet manufacturers, but also the supply chain. “AsBAA does not comment on public policy; however, we are concerned about the consequences of a growing trade dispute in the medium term,” she said. “AsBAA’s priority is to continue to represent the needs of our members, advocating the positive economic impact business aviation brings while finding solutions that allow business and trade to continue as normal, despite these political issues.
Lau added, however, that the bigger picture of the business jet market in China and Asia remains bright and advised members “to treat these announcements with caution while we await further clarity on the potential impact of the tariffs before we take any necessary actions to counter such measures.”