After Donald Trump signed an order for tariffs on steel and aluminum imports and threatened up to $60 billion tariffs on Chinese imports, serious concerns over its impact on the United States companies like Boeing followed. While tariffs do not pose a serious threat for Boeing as steel and aluminum alloys are just 1.7% of the total production costs, Seeking Alpha reports, the potential trade war could threaten its sales.

The 25% tariff on steel and 10% tariff on aluminum on imports with the exemption of Canada and Mexico is widely believed to be directed at China. Trump’s threat to impose additional tariffs of up to $60 billion on Chinese goods like tech, telecoms and apparel further prove this point.

As a response, Chinese government threatened to retaliate which could result in a trade war, and Boeing might be at the center of it. According to Aviation Week, at least 20% of Boeing’s exports go Chinese customers and the aircraft manufacturer estimates that in the next 20 years, at least 7,200 aircraft orders will go the country. In the past five years, one of every four Boeing jets went to a buyer in China, supporting U.S. workers. Bloomberg claims that since most of Boeing’s customers in China are state-owned airlines and lessors affiliated with government-controlled banks, the company is at a big risk. Additionally, even the few independent Chinese customers could be easily pressured by authorities to defer existing orders.

After the tariffs’ announcement, China’s foreign minister, Wang Yi, criticized Trump’s approach, saying that given the globalization of the world, a trade war is a mistake, however China would respond “China would have to make a justified and necessary response,” the minister said, according to The Guardian.

Following the tariff announcement, a sharp stock market sell-off in US and Asia was triggered. Boeing’s shares have fallen 9.4% since February 24, 2018, following the announcement. According to Market Watch, the company is now on track for their biggest weekly decline in over two years, as concerns over the negative effects of tariffs continued to weigh the manufacturer. As of March 14, Boeing’s shares have dropped $24.26, or 6.8%, during the week. The week’s price drop has accounted for 167 points, or 29%, of the Dow’s 578-point selloff.

So far, Boeing has not yet released a statement, concerning the tariffs. Interestingly, before the tariff announcement, Boeing had done quite well under Trump administration. CNBC reports that the company’s stock has jumped 117% since December, 2016, directly contributing 24% to the Dow Jones Industrial average since then. However, the Dow fell following the tariffs’ announcement.

While Boeing may be a casualty of a trade war, the severity of China’s retaliation remains to be seen. According to CNN, one of China’s nationalist papers suggested that the country could retaliate by shifting its aircraft orders to Boeing’s biggest rival Airbus, yet some experts are skeptical. Considering the extraordinary growth of China’s aviation industry, Airbus would not be able to meet the demand at the moment. Aerospace analyst Carter Copeland told the news outlet that "Airbus can't just ramp up its production immediately. There's not much flexibility to just switch from one manufacturer to the other". Right now Airbus and Boeing share approximately half of the market each, but in the future, China may switch to Airbus to send a message.

Additionally, while the biggest threat to Boeing right now is China’s retaliation, it is not the only country receiving the company’s exports. Roughly 70% of all Boeing’s commercial business is done outside of the U.S. and it is expected to grow in the next two decades with estimated deliveries of 41,000 planes worth $6.1 trillion according to Investor Place. Yet while the European Union also threatened retaliation to the U.S. tariffs whether Boeing would be impacted is questionable.

A week following the tariff’s announcement, Trump visited Boeing’s testing facility in St. Louis implying that there could be a deal for the company’s F-18 Super Hornet if they work out a good price. “Maybe we can work out a good price. Otherwise, we are going to buy them from somebody else but it will all be in the United States, right?" the president said.

Trump said that the U.S. plans to buy 24 F-18 jets praising the capability of the planes saying “latest and the greatest stealth and a lot of things on that plane that people don't even know about,” CNBC reported. However, while Boeing is negotiating service life modification contract that could add some components native to a stealth aircraft with the Navy, at the moment, the F-18s are not stealthy – they are not capable of evading radar.