US trade policy aviation impact: aerospace companies challenged

Predicting the direction of US foreign or trade policy under the administration of President Donald Trump is, in many ways, an exercise in futility, and the repercussions of that level of whimsy on business are just as difficult to ascertain.

US airlines and aerospace companies face a range of effects from Mr Trump's policies. Those firms are welcoming benefits from changes to US tax rates, but aerospace companies in particular are concerned about proposed tariffs on aluminium and steel.

The policy change could create roadblocks in a potential tie-up between Boeing and Embraer as they work to combat new competition from a partnership between Airbus and Bombardier.

The potential ramifications of a larger trade battle spurred by tariffs are tough to predict; however trickle-down effects could alter the reasonably bullish views that airlines have on corporate travel for 2018, and create challenges in forecasting demand in the future.