Will Grounding Boeing’s 737 MAX 8 Planes Affect Sino/US Trade Talks?
Following two 737 MAX 8 crashes, killing all passengers and crew members onboard, China was the first nation to ground the planes.
It’s the largest buyer of Boeing’s most popular passenger aircraft – with 97 of its 371 planes delivered to customers so far.
Based on a March 17 Seattle Times report on the aircraft’s design flaws, grounding them in China and worldwide could continue indefinitely.
The broadsheet explained that despite “flawed analysis (and) failed oversight,” the industry-controlled Federal Aviation Authority (FAA) certified the plane’s flight control system, saying:
Boeing’s safety analysis “delivered to the FAA for a new flight control system on the MAX…had several flaws” – serious enough to cause two planes to crash.
“That flight control system, called MCAS (Maneuvering Characteristics Augmentation System), is now under scrutiny,” adding:
“Current and former engineers directly involved with the evaluations or familiar with the document shared details of Boeing’s ‘System Safety Analysis’ of MCAS,” explaining serious flaws in its design.
The plane was rushed into production to get a competitive leg up on Airbus, Boeing’s main competitor – without proper attention paid to flight safety standards.
“Investigators are working to determine if MCAS could be the cause of both crashes,” said the broadsheet, most likely the case.
Redesigning the system, along with reconfiguring it on existing aircraft will be an expensive, time-consuming process, followed by proper testing to assure aircraft safety.
The planes are grounded worldwide indefinitely, a major blow to Boeing’s bottom line and reputation, a plus for Airbus and the Commercial Aircraft Corporation of China (Comac).
It’s developing a passenger aircraft to compete with Boeing’s 737 MAX 8. Its C919 began test flights in 2017. It has 815 orders from 28 customers, including Chinese state-controlled airlines.
Russia will have a competing aircraft this summer, the Irkut MC-21. At the August 27 – September 1 Moscow International Aviation and Space Salon (MAKS 2019), it’ll be shown publicly for the first time, aiming for certification by 2020.
According to Russian Minister of Industry and Trade, Denis Manturov, presentation of the plane at MAKS 2019 will “visually demonstrate to potential customers and future passengers one of the most important competitive advantages of the Russian airliner – an increased level of comfort.”
It’s been under development for 12 years, production slowed by US sanctions. Its design is technologically sound, its success dependent on cost and availability. At end of 2018, 175 orders were received, 50 from Russia’s Aeroflot.
China aims to develop and grow its commercial aviation industry. Boeing estimates its market will grow from about 14% currently to 20% of global air traffic by 2037, exceeding the US.
Boeing’s troubles and China’s focus on developing its aviation industry have implications for Sino/US trade talks. Trump said he’s in “no rush” to conclude a deal, adding:
“We’ll have news on China. Probably one way or the other we’re going to know over the next three to four weeks,” adding:
“President Xi saw that I’m somebody that believes in walking when the deal is not done, and you know there’s always a chance it could happen, and he probably wouldn’t want that.”
Nor does Trump, badly needing a deal to show at least the appearance of a win after many months of contentious trade talks.
In the weeks ahead, both sides will likely cobble together enough to reach agreement in principle – even though major structural issues will remain unresolved, and whatever may be agreed on may unravel ahead.
Both countries are world’s apart on key trade and other issues. Future disagreements are certain to bubble to the surface ahead. China is the major US political, economic, financial, and trade competitor.
Longstanding US policy calls for asserting its dominance over all other nations, notably China, Russia and Iran.
On Wednesday, the Wall Street Journal said negotiators of both countries aim to conclude a trade deal by late April.
Talks will resume in Beijing next week, followed by another round in Washington. Whether it’s enough for agreement in principle to be reached remains to be seen.
The Journal: Both “sides still have important issues to resolve including how to enforce a deal and the pace at which the U.S. and China will roll back the tariffs imposed over the past year,” adding:
“Mr. Trump vowed last week to walk away from a deal he considered insufficient. But behind the scenes, the president has been pressing (US trade representative Robert) Lighthizer to finish a deal, people familiar with the discussions said.”
Despite major unresolved differences, agreement will likely be reached so both sides can declare victory – no matter how tenuous.
My newest book as editor and contributor is titled “Flashpoint in Ukraine: How the US Drive for Hegemony Risks WW III.”