US-China trade war may ‘accelerate advance of COMAC’
December 29, 2024
The ongoing trade tensions between the US and China could accelerate the rise of China’s state-backed aircraft manufacturer, COMAC, according to Ronan Murphy, director at Alton Aviation Consultancy.
While global airline order volumes are unlikely to shift significantly in the short term, prolonged disputes – potentially exacerbated by the incoming Trump administration – could strengthen COMAC’s position within China and extend its influence across Asia, particularly in regions with strong Chinese ties.
The established dominance of Airbus and Boeing is expected to hold for now, but trade friction may expedite COMAC’s progress, potentially reshaping the market over time.
“The current duopoly between major OEMs remains firmly established; however, prolonged trade disputes could accelerate COMAC’s progress within China and potentially across parts of Asia where Chinese influence is notable,” Murphy told AGN.
“While there has been speculation about Embraer entering the narrowbody market, any such development would be a medium-term prospect rather than an immediate change.”
Aircraft production remains hampered by supply chain challenges, including semiconductor shortages and logistical bottlenecks.
Major OEMs, especially Boeing, have faced disruptions from strikes and halted production, which have strained smaller suppliers.
These issues are expected to persist into 2025, with recovery slow and production targets likely to fall short over the next year, Murphy explained.
“The aviation supply chain faces complex challenges due to extensive outsourcing over the past decade, creating reliance on a broad supplier network,” he said.
“OEMs, particularly Boeing, have experienced disruptions from strikes and production halts, putting financial strain on smaller suppliers that lack the resilience to handle irregular production cycles.
“These structural issues have proven persistent, with supply chain constraints now expected to extend into 2025 and beyond. While there are signs of stabilisation, significant improvements remain elusive; ongoing challenges are likely to hinder production ramp-ups and keep delivery rates below targets for the next six to 12 months.”
Heightened security concerns, sanctions, and export controls are driving OEMs to reevaluate their supply chains. Manufacturers are diversifying suppliers and relocating production to politically stable regions to reduce risks.
While trade disputes have impacted aircraft orders in China—exemplified by Boeing’s years-long halt in orders until late 2024—broader regional variations remain limited.
Airline strategies are still driven more by economic factors than geopolitical pressures, with order deferrals and aircraft preferences reflecting market conditions rather than external trade disputes.
But Murphy added: “Geopolitical tensions and security concerns are closely tied to broader supply chain challenges. OEMs are actively reassessing their supply chains, focusing on long-term resilience and reducing exposure to high-risk components vulnerable to sanctions or export controls.
“Where feasible, they are diversifying sourcing by shifting critical components to suppliers in more politically stable or allied jurisdictions. Geopolitical security has become a central factor shaping the strategic supply chain decisions of major OEMs.”
Supply chain issues and trade barriers are slowing the development of next-generation, low-emission aircraft. However, Murphy highlighted that the core challenge lies in advancing engine technology, requiring substantial investment and innovation.
Trade disputes exacerbate delays but are not the primary obstacle to achieving aviation’s sustainability ambitions.
“Global trade disputes generally hinder technological development by restricting trade in an inherently global industry,” he said.
“However, the most critical factor in developing next-generation, low-emission aircraft is the creation of a new engine that significantly reduces emissions while maintaining performance.
“This requires substantial R&D investment. Given the current engine reliability challenges, a clean-sheet next-generation engine and aircraft seem unlikely in the near term.
“While trade disputes and supply chain disruptions may contribute to delays, they are not the primary barrier to advancing next-generation aircraft development.”
While the duopoly of Airbus and Boeing remains intact, the rise of COMAC could signal long-term shifts in the competitive landscape, driven by external economic and political forces.
