U.S. tariffs favor Airbus over Boeing in competition

Tariffs imposed by the U.S. government are expected to have a significant impact on major aircraft manufacturers, Boeing and Airbus. Boeing, the largest commercial aircraft manufacturer in the U.S., could face challenges due to Donald Trump's trade policies. Boeing is a crucial player in the U.S. economy, being the largest exporter by dollar value. However, tariffs on goods from Europe may make Boeing's competitors, like Airbus, stronger in the market. Analysts predict that Boeing could suffer more from these tariffs, especially as European and retaliatory tariffs could increase the cost of its aircraft. Boeing relies heavily on imported components, making it vulnerable to rising production costs. Trump's proposed tariffs on steel and aluminum are expected to increase Boeing's building expenses. Additionally, delays in acquiring components from international suppliers could harm Boeing's ability to deliver planes on time, which is important for maintaining airline customer satisfaction. On the other hand, Airbus stands to gain market share if Boeing's prices increase. CEO Aengus Kelly of AerCap believes that tariffs could raise Boeing aircraft prices by around 25%. This could lead airlines to choose Airbus jets instead. Airbus has a more global production footprint, with assembly plants in the U.S. that may help it avoid some tariffs. Recent stock market movements reflect this uncertainty, with Boeing shares declining significantly while Airbus shares have seen an increase. Overall, the trade tensions are likely to reshape competitive dynamics in the global aircraft market, favoring Airbus amidst Boeing's struggles.