Boeing (BA) shares plunged 6.04% in pre-market trading on Monday, as investors reacted to China's announcement of retaliatory 34% tariffs on all U.S. goods. This move by China, in response to U.S. President Donald Trump's trade policies, is set to significantly impact various U.S. industries, with the aviation sector being one of the hardest hit.

The new tariffs are expected to severely affect Boeing's competitiveness in the Chinese market, making its planes considerably more expensive compared to rivals like Airbus and Commercial Aircraft Corporation of China (COMAC). This comes at a particularly challenging time for Boeing, as the company had only recently resumed full-scale imports to China in mid-2024, following a period of reduced sales due to the MAX 8 jet crashes and heightened U.S.-China tensions.

The impact of these tariffs could be substantial for Boeing, considering the significant orders placed by China's top three airlines. Air China, China Eastern Airlines, and China Southern Airlines have plans to take delivery of 45, 53, and 81 Boeing planes respectively between 2025-2027. These orders, now facing potential price increases, may be at risk of cancellation or renegotiation, further exacerbating Boeing's challenges in its largest market.