With Donald Trump ramping up a trade war, Dow Jones giant Boeing has been a big loser, while archrival Airbus has soared. Trump tariffs will raise costs. Boeing also will make prime target for retaliation by other countries.
So far in March, Boeing stock has plunged 11.7%, diving to their worst levels since late November. Airbus stock shot up 9.1% to a record high. Separately, Brazil's Embraer ascended 7.1% last week, hitting an all-time levels, after spiking 15.5% in the prior week on earnings.
Brazil stocks fell modestly early Monday. Airbus' U.S. shares were not trading. ERJ stock edged lower.
Trump has imposed 25% tariffs on Canadian and Mexican goods, though he's exempted many items until April 2. He's increased tariffs on Chinese goods by 20%. Meanwhile, Trump also plans to impose 25% tariffs on steel, aluminum and some other key commodities.
The tariffs will boost costs on key parts, Boeing CEO Kelly Ortberg told employees Wednesday, Bloomberg reported, citing video of the gathering. But the bigger problem is disrupting complex, global supply chain.
"That's really, really expensive for us — if we're building our products and we don't have the supply chain components," Ortberg said at the event.
Boeing imports many key parts from Canada, Mexico and China. It has a unit in Winnipeg, Manitoba.
Over time, Boeing might be able to source more parts in the U.S., but the steel and aluminum duties will still be a burden. And domestic suppliers have had their issues. Spirit Aerosystems has had such chronic problems that Boeing is taking it over.
European aerospace giant Airbus largely makes jets in Europe, though it does assemble some aircraft in Alabama.
Boeing Overseas Impact?
Meanwhile, other countries could retaliate against Trump tariffs by imposing duties on Boeing jets. That's especially likely in Europe and China, which boast domestic champions. Overseas Boeing suppliers that lose business due to Trump tariffs provide another reason to target Boeing aircraft.
Even without imposing tariffs, airlines in other countries may simply opt against ordering new Boeing aircraft.
Boeing and Boeing stock have struggled for years from a litany of mishaps.
U.S. stock markets have slumped while European markets have taken off. That partly reflects general concerns about the U.S. economy while stimulus plans bolster optimism in Europe.
Still, Boeing stands out as a specific Trump tariffs loser.
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