China planning additional 25% tax on US-built large cabin aircraft

China’s Ministry of Commerce announced plans to place an additional 25% tariff on imports of US-built aircraft weighing between 15,000kg and 45,000kg.

The tariffs, outlined by China as part of a $50 billion retaliation against duties on Chinese goods proposed by U.S. President Donald Trump, would add to the hurdles of selling private jets in an already sputtering market. Sales have been under pressure in China in the last couple years after President Xi Jinping began an anti corruption campaign, said Richard Aboulafia, an aerospace analyst with Teal Group.

Tensions escalated when Trump ordered his administration to consider another $100 billion tariffs against China, which prompted the Asian nation to vow it would defend its interests “to the end, and at any cost.”

The new restrictions on U.S. aircraft have yet to take effect, and there’s a hope that U.S. and China will reach a truce.

However, if the new rates come into effect the total import duty that Chinese owners would have to pay will be 30%.

The new measures will mostly affect aircraft from the Boeing 737 family but will also apply to all members of the Gulfstream family – all Gulfstream models except for its smallest aircraft, the G280, fit in that weight range

Gulfstream is at risk of losing its dominance in China – the large-cabin Gulfstream family are top-selling business jet brand in China. According to the AMSTAT database, there are currently 100 large-cabin Gulfstreams in operation on the Chinese mainland, with an additional 71 operating in Hong Kong. .

The United States remains the world’s largest market for business jets, but the Greater China market is expected to be the fastest-growing major market over the next 20 years, with the fleet size more than doubling, according to a Bombardier forecast.