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China tariffs will raise ‘high level of concern’ for Boeing, analyst says

(AP)

Ramifications from President Trump’s multi-billion dollar tariffs should raise “as high a level of concern as you can get” for Boeing workers.

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That’s according to aerospace analyst Richard Aboulafia, who told Seattle’s Morning News on Thursday, March 22, the tariffs will result in backlash from the Chinese government. Aboulafia says China could easily hit back at the U.S. by refusing to purchase more jets from Boeing.

China has the biggest appetite for commercial jets in the world. More than a decade ago China accounted for 2 percent of the market. Last year, the country made up 23 percent of the market.

President Trump signed an order Thursday that will lead to trade sanctions on as much as $60 billion worth of imports. It is punishment for how China has gone about challenging the U.S. supremacy in technology, Trump said. An investigation found China used hackers to steal secrets and pushed companies to disclose secrets in exchange for access to their market.

Expected penalties include restrictions on investment and tariffs on more than $40 billion worth of products.

Chinese officials urged the White House to act “rationally,” promising to open up to more foreign products and investment, The Associated Press reports.

Impacts on Boeing

Though China may be subtle about how it retaliates, Aboulafia says it could hurt Boeing’s long-term plan.

Boeing currently has plenty of orders. But the plan is to increase production.

“You need to keep feeding this machine…” Aboulafia said. “Chinese orders extend a few years, but what do you do beyond that?”

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China has ordered Boeing and Airbus jets. However, all orders could go to Airbus, which would be an easy punishment, Aboulafia points out. The two companies are direct competitors.

“No reason why they [China] couldn’t do that,” he said. There’s an Airbus factory in China.

China could retaliate within six months or less, Aboulafia says.

And anything that damages free trade will “poison the well here.”

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