StockMarketNews.Today – Dennis Muilenburg, Boeing chairman and chief executive, said he was hopeful that the trade war would be resolved despite US proposals last week for tariffs on a further $200bn worth of Chinese imports.
Speaking ahead of the Farnborough air show in the UK, which opens on Monday, he told the Financial Times: “Our voice is being heard. We are engaged with the US government and with the Chinese government … I’m hopeful we’ll come to a good resolution.”
Although Mr Muilenburg said Boeing had not felt any impact from the US-China tariffs, nor from the new US duties on aluminium and steel imports, a person with knowledge of the situation said that its executives are meeting regularly with high-ranking administration officials.
Analysts estimate that roughly 20-25 per cent of the orders in Boeing’s backlog are for Chinese customers, supporting thousands of US jobs. “The president is well aware of Boeing’s position,” the person said.
Concerns are growing that the trade dispute between the world’s two biggest economies, along with a separate US offensive against aluminium and steel imports from the EU, Mexico and Canada, will hit global growth.
Mr Muilenburg noted the “tough challenges to be resolved” in global trade. These included the framework for the UK’s departure from the EU. Referring to the UK government’s Brexit proposals, published last week, Mr Muilenburg said: “Being able to move goods around the world is fundamental to success in the aerospace sector.” However he said Boeing’s investments into the UK “are going to happen, regardless of where we end up on Brexit and discussions around trade deals.”
Earlier this month, Washington imposed duties on $34bn worth of Chinese imports, while Beijing responded with equivalent tariffs on imported US soyabeans, pork and other products. The Federal Reserve noted in June that US businesses were already putting investment on hold as a result of the tit-for-tat tariff war.
Beijing has so far refrained from targeting new Boeing aircraft. Nevertheless, if the dispute continues and the wider global economy is affected, this could “impact airline passenger and freight traffic, ultimately restraining demand for aircraft”, according to Cai von Rumohr of Cowen investment bank.
Mr Muilenburg dismissed suggestions that Boeing’s European rival Airbus could steal an advantage in China as a result of the trade row with the US. “You are not going to see sudden shifts in orders or delivery profiles,” he said. “That all said, we need to find productive trade solutions. That’s why we’re engaged with both governments. I’m confident that [they] understand the high value of the aerospace sector and what it means to their economic prosperity.”
Nevertheless, Boeing has had no orders from Chinese airlines yet this year, while China Aircraft Leasing Corporation has ordered 15 narrow bodies from Airbus on top of the bumper order for 50 passenger jets in December. Boeing said that the dearth of Chinese deals so far this year was because of the fact that its customers had already placed sizeable orders over the past two years.
Boeing Co Company Profile:
The Boeing Company is an aerospace company. The Company’s segments include Commercial Airplanes; Defense, Space & Security (BDS), such as Boeing Military Aircraft (BMA), Network & Space Systems (N&SS) and Global Services & Support (GS&S), and Boeing Capital (BCC).
The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, to the commercial airline industry. The Commercial Airplanes segment also produces commercial aircraft and offers a family of commercial jetliners.
The BDS segment’s operations involve research, development, production, modification and support of the products and related systems. The BMA segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems.
The BCC segment’s portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments.
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