Trump-Xi Summit: Beijing Unlikely To Commit To New Boeing Orders Even As US, China Talk Trade - Here Is What Happened

(MENAFN- Live Mint) Chinese President Xi Jinping is in Washington for his highly anticipated meeting with US President Donald Trump. Ahead of Xi's arrival, Treasury Secretary Scott Bessent announced the US and China have sealed a two-month extension to their trade truce.

Chinese President Xi and US President Trump had agreed to a one-year trade truce at a meeting in South Korea last October after a tit-for-tat tariff war.

The deal was set to expire in November and will now be extended to January 10.

Quick answers to key questions

.5 QUESTIONS1What is the significance of the Trump-Xi summit for US-China trade relations?⌵

The Trump-Xi summit highlighted ongoing efforts to manage tariffs and trade relations, following a previously agreed trade truce extension. It aims to facilitate dialogue between the two largest economies to address mutual economic interests.

2Why is there skepticism about new Boeing orders from China during the Trump-Xi summit?⌵

Skepticism exists because, despite optimism around the summit, negotiations for large-scale Boeing orders remain stalled, with a focus instead on finalizing a smaller deal for 200 planes.

3How have Airbus and Boeing's market shares in China diverged recently?⌵

Airbus has gained market share in China due to maintaining a more favorable relationship and a local final assembly line, while Boeing has faced restrictions and dwindled influence since 2017 amid trade tensions.

4Should US officials be concerned about Xi's emphasis on partnership over rivalry with America?⌵

Yes, this emphasis reflects a potential strategic intention to align Chinese interests with those of the US, but it also raises questions about the sincerity of cooperation amid ongoing tensions over trade and technology.

5What are the expected outcomes of the trade discussions between Xi Jinping and Donald Trump?⌵

The discussions are expected to address tariff reductions, trade restrictions, and could potentially pave the way for a more comprehensive trade agreement between the two nations.

Also Read | 'We should be partners, not rivals': What Xi Jinping said ahead of Trump meeting

"We will extend what we call the 'Busan Agreement' - the economic detente between the two countries that was scheduled to end on November 10 - that is going to be extended until January 10," Bessent said in an interview on Fox News, adding that both countries are still trying to figure out a potentially larger deal.

No US-China deal on Boeing

While there is optimism about the summit between the US and Chinese presidents, according to Reuters, hopes for a new China commitment to buy Boeing planes are sinking.

The Reuters report, which quoted two people briefed on the matter, said that the negotiations are still in flux. The planemaker instead is trying to finalize a May deal for China to buy 200 planes, rather than earlier hopes of securing new commitments for hundreds more jets, it added.

One of the people briefed on the matter said final details for part of the May deal could be announced during the summit if contracts can be finalized, despite the challenges.

Before it was signed, there had been concerns from China over whether it would receive guaranteed access to spare parts, following earlier threats from Trump. China's commerce ministry said in May the US had provided supply guarantees for aircraft engine parts ​and components under the Boeing deal.

Boeings loss is Airbus' gain

Boeing had been effectively shut out since 2017, while European rival Airbus had continued to expand its share in one of the world's biggest aviation markets.

China imposed restrictions on new deliveries from Boeing and halted parts purchases amid escalating tariff disputes with the US and favoured Airbus and homegrown COMAC.

Also Read | Can China hope to break the Airbus-Boeing aircraft duopoly?

Airbus has made more inroads in China than Boeing in recent years in part because it has a final assembly line in Tianjin and China-Europe relations have been "more benign" than those between China and the US, Shukor Yusof, founder of Singapore-based aviation consultancy Endau Analytics, told Reuters.

"Boeing has lost much of its influence in our region, partly due to politics, but mostly because of its own internal issues," he said.

China is expected to order around 9,000 new jets by 2045, more than any other region, according to Airbus and Boeing market forecasts.

According to Reuters, the two Trump-Xi summits this year were expected to catalyze a new round of Boeing purchases. Ahead of the spring summit, Boeing, Chinese and US officials were discussing a deal for as many as 500 jets.

After the May summit, Boeing CEO Kelly Ortberg said the smaller-than-expected 200-jet deal was an "initial tranche" of orders and that reopening the China market was the real win.

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