Why Shares of Boeing Flew Lower Today

Shares in aerospace giant Boeing (NYSE: BA) were lower by 7.3% as of 11 a.m. today. The move is due to today's implementation of 25% tariffs on goods imported from Mexico and Canada and a 10% import duty on Canada's energy products. In addition, the Trump administration increased tariffs on products from China to 20%. Trade wars are bad news for Boeing. First, Boeing is traditionally the largest capital goods exporter in the U.S., and the company could see a loss of orders if airlines shift orders to a competitor like Airbus, which is headquartered in the Netherlands. Similarly, tariffs may spur renewed investment by regional competitors keen to develop their own airplanes.Second, the global commercial airplane industry is highly interconnected, and an increase in tariffs could push up suppliers' costs, which would inevitably pass onto Boeing. That could eat into Boeing's profit margins precisely when the indebted company needs to ramp up production of its 737 MAX and keep developmental costs down for the 777X.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool