American aerospace giant Boeing has taken a major hit amid escalating trade tensions between United States and China. In a recent blow Chinese government directed its domestic airlines to halt deliveries of Boeing aircraft, marking a serious setback for the manufacturer.

As a direct result, a Boeing 737 MAX jet, originally customized. And painted for China’s Xiamen Airlines was returned to Boeing’s production facility in Seattle this Sunday. The aircraft which had undergone final preparations at Boeing’s completion center in Zhoushan part of a batch awaiting delivery to Chinese carriers.

This move seen as retaliation by China against steep tariffs imposed by U.S. President Donald Trump. Trump had introduced a 145% tariff on Chinese goods prompting Beijing to counter with a 125% tariff on American imports.

Tariffs have inflated the cost of a new 737 MAX jet to approximately million—posing a significant financial burden on Chinese airlines.

Boeing’s 737 MAX, once its best-selling model, has already been under immense pressure due to safety concerns and multiple fatal crashes in previous years. The new trade barriers have only worsened the company’s position in one of its key international markets.

Industry analysts warn that China’s aviation sector now faces a tough challenge. Boeing’s absence could create a supply gap that Airbus—its primary European competitor—may struggle to fill due to limited production capacity.

Meanwhile, China’s own aircraft manufacturer, COMAC (Commercial Aircraft Corporation of China, Ltd.). Still heavily depends on American-made engines and components, making a full pivot away from U.S. products difficult.

However, insiders report that many Chinese airlines and leasing companies have stockpiled spare parts over the past few years. Which may help cushion the blow. Additionally, China has placed increased orders for engines via Airbus. Which—despite containing U.S.-made components—won’t be hit as hard by tariffs since they’re part of European-manufactured aircraft.

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Return of the 737 MAX jet underscores the growing impact of geopolitical tensions on global industries. Boeing once a symbol of America’s industrial might. Now finds itself caught in a high-stakes economic standoff—with consequences rippling across both hemispheres.