A Trump Win Could Be Costly For Boeing And Aerospace & Defense

Core Viewpoint - The potential return of former President Donald Trump to the White House could introduce significant challenges for Boeing, particularly regarding tariffs, defense spending, and regulatory changes impacting the aerospace industry [1][2][9]. Tariffs and Trade - Trump has proposed imposing tariffs of 10% to 20% on all countries trading with the U.S., and 60% on China, which could disrupt the U.S. commercial aerospace industry that had a $47 billion trade surplus in 2023 [3][4]. - Analysts warn that such tariffs could be "absolutely ruinous" for Boeing, especially given the company's reliance on a global supply chain, with approximately 30% of the 2.3 million parts for the 787 sourced from overseas [4][5]. - A renewed trade war with China could severely impact Boeing's sales, as deliveries to China, which accounted for 24% in 2018, have ceased since 2019 [4]. Defense Spending and Regulatory Environment - Uncertainty looms over defense spending under a potential second Trump administration, with suggestions that the defense budget could be cut by half, which could affect Boeing and other defense contractors [9]. - The potential for relaxed restrictions on mergers and acquisitions could create a favorable environment for Boeing to divest non-core assets, although significant mergers may still face Pentagon opposition [10]. Impact on Federal Aviation Administration - Conservative ambitions to overhaul the Federal Aviation Administration could lead to turmoil at a critical time when the agency is working to address Boeing's manufacturing quality issues [12].