China has agreed to buy 200 Boeing jets, US President Donald Trump told Fox News Channel on Thursday, a number that was far fewer than analysts had expected, and the planemaker’s shares fell.
Details of the deal were not immediately available, including when and which type of jets would be delivered, but the amount was much smaller than the roughly 500-plane package that sources told Reuters was under discussion ahead of a meeting on Thursday between Trump and Chinese leader Xi Jinping.
"One thing he agreed to today, he's going to order 200 jets ... 200 big ones," Trump said on Fox News' Hannity, referring to Xi.
Boeing shares fell 4.1% during market trading on Thursday.
A large Boeing order was one of many business deals expected to come out of the closely watched summit, as well as an extension of a fragile trade truce struck last October, when Trump suspended triple-digit tariffs on Chinese goods and Xi backed away from choking global supplies of vital rare earths.
The White House did not immediately respond to a request for comment on Wall Street's reaction to the announcement.
The talks had been for 500 Boeing 737 MAX jets, plus possibly dozens of more expensive widebody jets in follow-on orders after the summit, according to sources familiar with the discussions. China has also been in talks for a similarly sized deal with European planemaker Airbus.
The rival planemakers have been competing fiercely for sales to China, the world's second-largest aviation market. In the 2010s, Airbus pushed past Boeing to take majority control of the market, even opening an A320 final assembly plant in Tianjin.
Beijing has to buy from both to keep up with booming growth in travel demand. China needs to order as many as 1,000 new airplanes now, according to many analysts.
The country will require at least 9,000 new jetliners by 2045 according to market projections by both Boeing and Airbus.
The country's last big order with Boeing was during Trump's November 2017 trip to Beijing, when it agreed to buy 300 Boeing jets. Relations between the two countries soured after that, and Boeing has received 51 orders, mostly for freighters, since then.
Analysts say Beijing has a history of using diplomatic summits to make high-profile aircraft order announcements that reflect the political climate at least as much as contractual realities.
Airplane purchases by Chinese airlines require approval from the central government, frequently tied to diplomatic visits. The actual operator oftentimes is not clear until closer to delivery of an airplane, Matt Akers, an aerospace investment analyst with BNP Paribas, told Reuters.
"It’s possible we still get more orders this trip, but right now investors are interpreting this as being less than hoped for," he said.
Boeing CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were among the American executives who accompanied Trump to China, in hopes of clinching deals or resolving disputes.
Trump has aggressively pushed countries during trade talks to boost purchases of Boeing airplanes.
Ortberg last month told Reuters he was counting on the Trump administration's support to seal a major deal with China.
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