LONDON (Reuters) - Boeing Co (BA.N) is concerned about the impact of possible trade tariffs on the cost of running its supply chain, but has not yet seen any impact from U.S.-Chinese trade tensions on its business, Chief Executive Dennis Muilenburg said on Sunday.
“The discussion right now is proposed tariffs, ongoing discussions. So in terms of actual implementation and things that are impacting us, we haven’t seen a material impact yet,” Muilenburg told reporters.
“We are very much engaged in the discussion. We are concerned that it could affect supply chain costs. But note that supply chains are flowing in both directions between (these) countries as we both support existing fleets as well as build new airplanes.”
Washington recently imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded with tariffs on the same amount of U.S. exports to China..
The U.S. administration then raised the stakes, threatening 10 percent tariffs on $200 billion of Chinese goods, prompting China to warn it would hit back.
“Rhetoric about potential penalty actions are a concern to us,” Muilenburg said.
Speaking ahead of the Farnborough Airshow, Muilenburg said both nations understood the importance of aerospace to their economies.
He said they shared many interests, as China needed planes to boost its air transport capacity and the United States relied on the sector for thousands of valuable export jobs, with aerospace making up the largest single trade surplus item.
“Aerospace thrives on global trade, free and open trade,” Muilenburg said, adding the sector drove economic benefit globally.
Muilenburg said Boeing would not take a decision on whether to launch a possible new mid-market passenger jet until 2019.
But it would not let the entry to service slip beyond a target of 2025, even though it is taking the time needed to hone the business case.
“We want a 2025 airplane,” Boeing Commercial Airplanes CEO Kevin McAllister said.
Boeing is looking at developing a plane to try to stimulate new routes in a gap between its benchmark 737 single-aisle model and its smallest wide-body jets.
Analysts say the deadline is crucial because it represents the sweet spot for replacements of elderly 757 and 767 fleets.
Reporting by Tim Hepher, Eric Johnson and Mike Stone; Editing by Mark Potter
