China's New Aircraft Tariffs Hit G550, G650, and BBJ1

 - April 4, 2018, 12:42 PM

The Gulfstream G550 and G650, as well as the Boeing Business Jet BBJ1, are ensnared in 25-percent aircraft import tariffs imposed today by China as a result of an escalating tit-for-tat trade war with the U.S. It’s unclear if these tariffs are an increase of, or are in addition to, China’s existing 22-percent import tariff on business aircraft.

Aircraft with “unladen weights” (i.e. basic empty weights) between 15,000 kg/33,069 pounds and 45,000 kg/99,208 pounds are included in China’s latest tariff list that covers $50 billion worth of imports. Basic empty weights for the Gulfstream G550 and G650 are approximately 21,546 kg/47,500 pounds and 24,131 kg/53,200 pounds, respectively. The BBJ1 is near the top of the tariff range, with a BEW of 44,334 kg/97,740 pounds. No other FAA-certified, U.S.-manufactured business aircraft appear to fall within this range.

Citi defense and aerospace researcher Jonathan Raviv expects these tariffs to have only a limited effect on Gulfstream, as the bulk of its sales are in North America and Europe. “The bizjet rebound has never been prefaced in China, nor should it; there are other structural impediments, and the Chinese bizjet market has disappointed for years,” he said. “China has been a modest tailwind for Gulfstream lately. This tariff talk could simply further push back the China opportunity.”