Boeing investors brace for fallout from Trump tariffs
Investors in Boeing are braced to learn the full impact of Donald Trump’s trade war, amid fears the US planemaker could be hit harder than first expected after jets intended for a Chinese airline were returned to the US.A Boeing 737 Max 8 plane intended for use by a Chinese airline returned to the US on Monday from Boeing’s China finishing centre, according to flight data cited by Reuters.It followed the arrival in the US on Sunday of another 737 Max painted in the livery of China’s Xiamen Airlines at Boeing’s US production hub in Seattle.Boeing’s share price fell by nearly 3% on Monday, in line with a sell-off across Wall Street.US stock markets have been hit with much higher volatility this month as investors have tried to work out the effects of Trump’s tariffs.
The aviation industry has been caught up in the trade war,Trump’s tariffs on goods from almost all countries have caused disruption across the world, but trade in goods between the US and China has been most affected, with levies of 145% on US imports and 125% on goods going the other way,A new 737 Max has a market value of about $55m (£41,4m), according to IBA, an aviation consultancy,That makes a 125% tariff prohibitive without significantly changing the business model of the airline business.
The return of the Boeing jets underlines the vulnerability to tariffs of the US’s biggest manufacturing exporter.It adds to Boeing’s problems just as it was trying to recover from a mid-air door panel blowout in January 2024 that prompted the company to replace its chief executive.Kelly Ortberg, who took over Boeing after the safety crisis, will reveal the company’s first-quarter financial results on Wednesday.Analysts expect a significant improvement in sales compared with a year earlier, with revenues forecast to have risen 20% to $19.8bn, although they still expect losses of $466m for the quarter.
However, the results are likely to be overshadowed by questions over the effect of tariffs on the business.Douglas Harned, an analyst at Bernstein, a research company, said he did not expect “definitive answers” on the tariff hit but was “concerned that risks are larger than expected” given airlines’ discomfort with paying tariffs, and possible delays to production to try to avoid levies.Harned said the pause on Chinese deliveries could hit cash generation in 2025, although he added that he expected the planes to be delivered eventually.Yet investors are having to contend with huge uncertainty over the White House’s intentions.Trump’s current policy is to raise tariffs on many countries after the end of a 90-day “pause” on higher rates that excluded China, announced by the US president after market turmoil spread to the bond market.
Richard Aboulafia, the managing director of AeroDynamic Advisory, a consultancy, said the Trump administration had showed a “profound and hard-earned level of ignorance” of how the aerospace industry works, and that long-term tariffs would be damaging for Boeing.Aboulafia said the short-term hit to Boeing’s cash should be relatively limited but added that the company should push back hard against Trump’s tariffs, particularly to avoid a “catastrophic trade war with the rest of the world”.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionFor the Chinese market, “in the long term it starts to matter”, Aboulafia said.Chinese airlines are expected to account for as much as a fifth of new aircraft sales in one of the key markets for Boeing and its European rival Airbus.“You can’t just leave that to Airbus,” Aboulafia said.
In a sign that the trade war could intensify beyond the US-China relationship, on Monday, Beijing warned it would take “resolute and reciprocal” countermeasures against other countries negotiating with the US if they made a deal at China’s expense.However, the rest of the world’s aviation industry may be less likely to be affected by countermeasures, given China’s reliance on US and European planes.Reuters reported that the 737 Max 8 landed in the US territory of Guam on Monday, after leaving Boeing’s Zhoushan completion centre near Shanghai, data from the flight-tracking website AirNav Radar showed.A spokesperson for Xiamen Airlines on Monday confirmed to Reuters that two planes marked for the carrier had gone to the US but declined to provide a reason.Boeing was approached for comment.
Boeing investors brace for fallout from Trump tariffs
Investors in Boeing are braced to learn the full impact of Donald Trump’s trade war, amid fears the US planemaker could be hit harder than first expected after jets intended for a Chinese airline were returned to the US.A Boeing 737 Max 8 plane intended for use by a Chinese airline returned to the US on Monday from Boeing’s China finishing centre, according to flight data cited by Reuters. It followed the arrival in the US on Sunday of another 737 Max painted in the livery of China’s Xiamen Airlines at Boeing’s US production hub in Seattle.Boeing’s share price fell by nearly 3% on Monday, in line with a sell-off across Wall Street. US stock markets have been hit with much higher volatility this month as investors have tried to work out the effects of Trump’s tariffs
Trump’s erratic tariffs harder to navigate than pandemic, says UK export agency
The government agency responsible for supporting UK exporters has warned that uncertainty created by Donald Trump’s rapidly shifting tariff policies is making it difficult to predict the financial fallout for British businesses.Tim Reid, the chief executive of UK Export Finance (UKEF), said the US president’s escalating trade war posed a unprecedented challenge.UKEF is no stranger to a crisis. It was established in 1919 to help firms hit by the submarine blockade after the first world war. A century later, it mobilised to get government-backed loans and financial support to companies whose revenues were upended by supply chain disruptions during the Covid pandemic
NatWest investors to scrutinise pay in last AGM before full privatisation
This week, NatWest will hold its last annual shareholder meeting before returning to full private ownership, with the government expected to sell its remaining stake in the bailed-out bank in the coming weeks.The bank, formerly known as Royal Bank of Scotland (RBS), will host shareholders on Wednesday at its sprawling Gogarburn campus in Edinburgh, the £350m complex that became a symbol of the excesses that led to RBS’s £46bn bailout in 2008.Once known for cavernous offices featuring deep-pile carpets and expensive artwork under the disgraced former boss Fred Goodwin, Gogarburn is now a hub for executives proudly declaring a restrained approach to banking. Speaking to shareholders during a virtual event earlier this month, the chief executive, Paul Thwaite, said he was “not seeking to dramatically change the shape of our business or the amount of risk we are willing to take”.While the chancellor, Rachel Reeves, is pushing for more risk-taking across the City that could help kickstart growth, ministers will find some comfort in the fact that NatWest will be left in a much stronger position than it was 17 years ago
Can Trump fire Federal Reserve chair Jerome Powell?
The US Federal Reserve chair, Jerome Powell, is facing attacks from Donald Trump, who is now threatening to fire the head of the central bank.Such a move would be unprecedented. The president has historically respected the independence of the central bank, and kept out of its way – even if there was disagreement over Fed policy.But, of course, it looks like Trump is following his own playbook.“Powell’s termination cannot come fast enough!” Trump said on social media last week
Scottish Water staff to strike for two days as pay standoff continues
Scottish Water staff will strike for two days from the early hours of Tuesday as a standoff over pay continues at the state-owned company.The striking workers’ union warned that emergency repairs and quality checks to water supplied to 5 million people across Scotland would not be carried out during the action on Tuesday and Wednesday.More than 1,000 workers in the Unison union will go on strike for the second time in a month in the pay dispute, after rejecting a deal that the union said was 2.6% and followed years of real-terms cuts to wages.The Unison Scottish Water branch secretary, Tricia McArthur, said: “Scottish Water workers are simply asking to be paid fairly for the essential services upon which everyone in Scotland relies
The Guardian view on City deregulation: a recipe for recklessness
In its desire to ensure the City of London remains attractive after Brexit, the Treasury seems to have forgotten one of the major lessons of the 2008 financial crisis: when regulation is lax, risks accumulate. This month, it launched a consultation about whether it was time to lighten the rules governing alternative asset managers, including private equity and hedge funds, in the belief that doing so will boost growth. There is little evidence to support this idea, and every reason to think it could exacerbate systemic risks.The proposal is consistent with Rachel Reeves’s belief that expanding the financial sector will deliver economic prosperity. The chancellor has suggested that post-crisis regulations went “too far”
‘When medieval times return, I’ll be ready’: Bella Ramsey on friendship, fashion and The Last of Us
Sunday with Paul Chowdhry: ‘I’ll have a big brunch, then lie around watching YouTube’
Jameela Jamil: ‘I used to be a massive troll and bitch on the internet’
On my radar: Romola Garai’s cultural highlights
From Sinners to Étoile: a complete guide to this week’s entertainment
William Morris’s legacy of radical creativity | Letters