Boeing Co. (NYSE:BA) stock was up 1.94% in early afternoon trading on May 18. The company received some bad news in light of Trump torpedoing the Iranian nuclear deal, as it could cost Boeing $20 billion in aircraft deals. Airbus, its chief European competitor, was threatened with the same fate. However, the European powers are moving to keep the Iran deal alive, and trade tensions are heightening between the two Western blocs.
The United States has threatened to impose sanctions on the European Union after the World Trade Organization ruled that Airbus received illegal government funding to develop jetliners. The ruling adds fuel to an already heated trade spat between the two blocs, exacerbated by steel and aluminum tariffs pursued by the Trump administration and his scuttling of the Iran deal. Airbus could also take a hit between $18-20 billion for a 100 plane deal with Iran.
The EU financing of Airbus hurt sales of Boeing’s 747 jumbo jetliner and 787 Dreamliner. The U.S. will now have to determine appropriate tariffs as countermeasures to make up for the reported losses. For its part, Airbus has predicted that future sanctions will be minor.
Boeing is also at risk from an ongoing trade dispute with China. Trump has signalled that he may back down from stricter demands, from Democrats and Republicans have now stepped in to apply pressure during negotiations. The company will likely be at the mercy of these ongoing disputes going forward.
