Isn't the alternative an abandonment of the 737 max 8 series from international carriers? The US currently has the largest aviation market but it's growing globally. Airbus has the 320neo and 220 which are direct/close competitors.

Remember the 737 has been slowly growing each generation: the A220-100 doesn't compete with the 737 MAX at all (it's smaller than the 737 MAX 7, and the MAX 7 has only 61 orders, out of over 5000 total orders). It provides a possible replacement for the A318 and 737-600 (but also neither of those sold well either!); it's biggest competition is probably the E195-E2.

The A220-300 competes with the A319neo and 737 MAX 7 (and the A319neo isn't selling any better than than the MAX 7).

I don't think really an abandonment is on the cards: too many fleets are too heavily bought into the 737 family, and the cost of migrating away is real. By way of comparison, the A320(ceo) hardly had the best of starts to its life either with the Air France Flight 296 crash (which while different, still wasn't exactly good press!).

Then the interesting question is whether airlines would punish them by forcing better terms or even lawsuits, and would shareholders likewise punish them by selling the stock.

Not to forget a third category: customers. I heard that there were considerable cancellations or at least fuzz about going to ride a 737 Max.

I'm fairly sure knowingly selling defective airplanes involves some liability and breach of contract issues even without criminal charges. No need for the FAA to punish Boeing, but I expect them to feel the weight of public opinion.