Investing.com -- AerCap, the world's largest aircraft leasing company, voiced concerns on Monday about the potential impact of new trade tariffs proposed by U.S. President-elect Donald Trump. The company's CEO, Aengus Kelly, suggested that these tariffs could disrupt supply chains and hamper Boeing (NYSE:BA)'s efforts to generate much-needed cash.
According to a report by Reuters, Kelly emphasized that the primary focus for Boeing and U.S. regulators should be to expedite the certification of the 737 MAX 7, 737 MAX 10 jets, and the long-delayed 777X. He made these comments during an exclusive interview on the sidelines of the Airline Economics conference.
Trump's proposed tariffs, which could reach up to 10% on global imports and 60% on Chinese goods, along with a 25% surcharge on Canadian and Mexican products, are intended to protect U.S. workers. However, experts believe such measures could likely provoke retaliatory actions from Europe and other regions.
Kelly pointed out that many parts supplied to Boeing, Airbus, and Embraer aircraft are common, raising questions about the practicality of the tariffs. He questioned the implications of a tariff on an engine partially made in France, suggesting that such a tariff could be counterproductive. Notably, Boeing's largest engine supplier is CFM, a company owned by GE Aerospace and France's Safran (EPA:SAF).
Kelly further stressed on the need for Boeing to generate cash, stating that tariffs would not support this goal. He explained that cash generation requires the delivery of airplanes, which in turn necessitates certification. Without certification, Kelly argued, there is no chance of generating cash, making it a crucial focus area.
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