Boeing warns of impact on supply chain due to tariffs

Brian West, Boeing's executive vice president and chief financial officer, expressed concern about the future disposition of parts in the supply chain due to the tariffs imposed by Donald Trump.

The executive was optimistic that in the short term the manufacturer would face few problems dealing with the new tariffs, which applied to products coming from outside the U.S., because they have a good cushion of inventory purchased.

“On the supply side, we don't see a significant impact (from the tariffs),” West said during his participation at the Bank of America global industrials conference held this week.

On the aircraft demand side, West mentioned the large backlog of orders and how they would be used to reconfigure deliveries from airlines that were under threat of reciprocal tariffs to those that were not.

In short, Boeing would prioritize U.S. domestic customers in the delivery pipeline over international customers.

According to the executive, this is a short-term solution, which becomes more difficult with a prolonged trade war.

According to the CFO, the aluminum Boeing uses is almost all domestically sourced and represents between 1% and 2% of the average cost of an aircraft, plus 80% of all parts and materials used at BCA (Boeing Commercial Aircraft) and 90% at BDS (Boeing Defense, Space & Security) come from domestic suppliers.

The problem is that many suppliers in the supply chain do not have the economic capacity to stock inventory and their raw materials would come from countries to which the new tariffs were applied.