Boeing Says It Doesn’t Expect Major Impact From Tariffs

Boeing chief financial officer Brian West said Wednesday that the plane maker most likely won’t see “material near-term impact” from tariffs.

“On the supply chain, on the input side, for us, we don't see material near-term impact,” West said at an investor conference. “And part of that is because we have, as many of you know, a lot of inventory that was purchased pre-tariffs. It's also important to understand that 80% of our commercial spend and over 90% of our defense spend in our supply chain is U.S.-based.”

President Donald Trump said he would place tariffs on imports from Canada, Mexico and China. The Trump administration has also said it would place a 25% tariff on steel and aluminum imports from all countries, materials that are used in the aerospace industry. 

“And furthermore, something like aluminum and steel that gets some headlines, nearly all of the aluminum and steel that we buy is U.S. sourced,” West said. “And together, they account for like 1% to 2% of the average cost of an airplane. And given our inventory levels and given hedging strategies, the cost exposure is even 1% to 2% lower. So we think we've got that pretty well managed.”

West did express some concern that tariffs could have an impact on the availability of parts. 

“What we do worry about is availability of parts because this is a broad complicated supply chain and people have different levels of exposure to it,” West said. 

A Backlog Gives Boeing Some Cover

West said tariffs also won’t have a big impact on plane orders due to the company’s major backlog. Boeing ended 2024 with 6,245 unfilled orders.  

“On the commercial side, the demand side, at this stage, similarly, don't see near-term material impact, primarily because we have a big backlog, $0.5 trillion,” he said. “And it's a robust versatile backlog to different customers, lots of different jurisdictions.” 

He added that the plane maker also has the ability to move orders around in its backlog to accommodate customers. 

“And if a customer needed some flexibility because of some decisions that they were making, we can move around in a big backlog and try to accommodate best we can,” West said. “So we try to exercise flexibility to help them achieve what they need to achieve with some uncertainty. So we think we've got enough room to breathe.”

However, West cautioned that if the tariffs become long-term that could signal some uncertainty for Boeing. 

“And if this goes on for a lot longer and it's a lot more protracted, I don't know,” West said. 

Boeing's Path to Recovery

Trump’s tariffs come at a pivotal moment for Boeing as it continues to recover from the Alaska Airlines blowout last year. As a result of the incident, the Federal Aviation Administration placed a cap on 737 Max production and that cap is still in place. 

The company also overhauled its senior leadership and current CEO Kelly Ortberg has promised to make the company “an aerospace leader again.”

Ortberg also told employees in a companywide address on March 12 that tariffs could risk driving up costs and disrupt the supply chain, according to a report from Bloomberg.

A coalition of groups representing airlines, air traffic controllers, suppliers and manufacturers wrote a letter to the Trump administration last week, urging for an exception of tariffs. The group argued that an exception would allow the industry to remain competitive.