China’s aviation growth slows amid tariffs

[WORLD] Despite some reductions in tariffs, Chinese airlines purchasing Boeing aircraft from the United States still face millions of dollars in additional costs due to remaining import duties. Analysts warn these higher costs, combined with ongoing global delivery delays, will significantly slow the expansion of China’s civil aviation sector. These pressures come at a time when China’s demand for air travel is rebounding sharply after years of pandemic disruptions.

According to a new note from China International Capital Corporation (CICC), the country’s civil aviation passenger capacity is projected to grow by just 3.1% annually through 2028. This is a stark contrast to the rapid 15.4% annual growth China experienced in the decade leading up to 2019. The combination of trade tensions, supply chain issues, and surging post-pandemic demand has created a bottleneck for airlines eager to expand fleets and routes.

Boeing, one of the world’s largest aircraft manufacturers, has been particularly affected by these challenges. Chinese airlines have historically been major customers, but tariffs imposed during the U.S.-China trade war—and not fully lifted—continue to weigh on purchasing decisions. Meanwhile, production delays and order backlogs across the global aviation industry further compound the problem, restricting the pace at which airlines can scale up capacity.

Implications

For businesses, particularly Chinese airlines and related sectors, the constrained growth in aviation capacity means limited ability to expand domestic and international routes. This not only affects airline revenues but also impacts airports, tourism operators, and freight companies that rely on increased air traffic. Airlines may also pass higher aircraft acquisition costs on to passengers, tightening margins and raising ticket prices.

For consumers, the slowdown could mean fewer available flights, especially to and from international destinations, potentially driving up fares and reducing travel options. Post-pandemic, many travelers are eager to fly again, but the mismatch between demand and capacity may result in longer booking windows, crowded planes, and premium pricing during peak seasons.

For public policy, the situation underscores the ongoing costs of trade disputes. Despite tariff reductions, partial barriers still distort market dynamics and place additional burdens on industries and consumers. Policymakers in China may need to accelerate domestic aircraft development or pursue broader trade negotiations to alleviate long-term aviation bottlenecks. The pressure could also influence China’s broader industrial strategies and push further investment into local aerospace manufacturing.

What We Think

This slowdown in China’s aviation capacity growth reflects how global trade frictions and supply chain vulnerabilities ripple across sectors, even years after peak tensions. While China has been keen to diversify its aviation partnerships and develop homegrown aircraft, scaling domestic production to meet booming demand remains a long-term challenge.

Boeing’s difficulties in the Chinese market also highlight the vulnerability of multinational firms to geopolitical crosswinds, with suppliers, airlines, and travelers all feeling the knock-on effects. Even as some tariffs are reduced, partial barriers can still create substantial financial burdens that affect purchasing patterns and expansion plans.

From an editorial standpoint, the situation reveals a deeper story about the fragility of globalization: supply chains and market access once taken for granted can be reshaped overnight by political shifts. We believe businesses should treat this as a wake-up call to build more resilient, diversified sourcing strategies. Moreover, governments on both sides have an opportunity to lower remaining barriers and foster smoother cross-border commerce—if they are willing to prioritize economic cooperation over rivalry.