A heightened war of words between the Trump Administration and China has ignited concerns that specific companies such as Boeing Co. (NYSE:BA) may be in trouble in the event of an all-out trade war between the two nations.
Companies like Boeing have been put in the cross hairs with initial tariffs being placed on Boeing planes by the Chinese administration, a fact which has spooked many investors and resulted in a cause for pause among many who believe in the company’s long-term trajectory but may be skeptical of the current geopolitical environment.
As has been widely reported, the feeling among many analysts is that the Chinese tariffs which have been placed on Boeing planes represent somewhat of a symbolic tax, given the fact that the new tariffs would affect planes with an empty weight of between 15,000 kg and 45,000 kg.
Because the new 737 MAX planes produced by Boeing are much larger than the planes which would otherwise be affected by this ruling, some have suggested that this move may be considered a negotiating tactic, with the effect being a "warning shot" to the Trump Administration and Boeing that the Chinese government has a significant amount of leeway to swing the balance of power in trade discussions at this point in time.
While Boeing’s current orders to China are not likely to be affected by this dispute, should tensions heat up and China gives Boeing competitor Airbus future orders, the long-term situation for Boeing may not be as red hot.
Invest wisely, my friends.
