Trump tariffs are small risk for U.S. aerospace industry, Barclays says

Aerospace stocks were among the gainers on Wednesday as investors sought to re-weight their portfolios in response to Donald Trump’s victory in this week’s U.S. presidential election.

The gainers included jet-engine maker GE Aerospace (NYSE:GE) and aircraft components maker Honeywell International (NASDAQ:HON).

While these companies may benefit from lower corporate taxes and less regulation that Trump has promised, there are some risks. Trump’s proposed tariffs on imports are one concern, but’s comparably minor, according to analysts at financial-services firm Barclays.

“We see higher tariffs as a potential risk for aero but a relatively small one as compared to broader industrials,” David Strauss, analyst at Barclays, said in a November 7 report. “Boeing’s (NYSE:BA) deliveries to China could be impacted, although China now only constitutes 3% of Boeing’s (BA) backlog as compared to 10% prior to Trump’s first term and the escalation of trade tensions.”

GE Aerospace (GE) and RTX (NYSE:RTX) supply parts for the C919 narrowbody plane made by Chinese aircraft manufacturer Comac, “although this constitutes a very small portion of their businesses,” according to Barclays.