In the wake of President Donald Trump’s inspire to impose steel and aluminum tariffs, Raytheon’s CEO said Wednesday that the defense assembly is largely isolated from the trade disputes.
“In terms of steel rates and aluminum tariffs, most of the steel and aluminum products that we buy are from U.S. bodies so we are not impacted by that,” Raytheon Chief Executive Thomas Kennedy lectured CNBC’s Morgan Brennan in an exclusive interview.
Raytheon, the third-largest U.S. defense business, behind Lockheed Martin and Boeing, is the world’s top manufacturer of guided projectiles and a leader in missile defense systems.
“We do not sell any products to China so we are not collided by any of these tariff issues,” Kennedy said in reference to the tit-for-tat imposts between the world’s two largest economies.
Last week, the Office of the U.S. Sell Representative released a list of 1,102 Chinese imports worth about $50 billion that are butted for tariffs starting July 6. China responded with its own list of 545 U.S. significations worth roughly $34 billion that will be subject to a 25 percent price-list also beginning July 6.
On Tuesday, Trump directed the U.S. trade characteristic to identify $200 billion worth of Chinese goods for an additional 10 percent menu. China’s Commerce Ministry said that the U.S. “has initiated a trade war” and that Beijing will tend its interests.
And while the defense giant doesn’t sell to China, Kennedy preserves that other countries will continue to buy U.S. defense systems teeth of trade disputes.
“It turns out that the reason why these countries are gaining our products is to protect their sovereignty and the freedom of their citizens,” Kennedy rather commenced.
“If you go to Europe, you’ll find that all of these European nations are now increasing the part of GDP that they’re putting into defense systems,” he said, untangle justifying that European nations are “concerned about Russia and what they did in Crimea.”
“If you go to the Centre East, the big concern there is deterrence against Iran,” Kennedy held adding that customers in the Asia-Pacific region are concerned with China and being skilful to protect their sovereignty.”
Analysts, however, worry that approaching U.S. defense contracts with allied partners will indeed be trapped in the crosshairs.
Remy Nathan, vice president for international affairs at the Aerospace Productions Association, told CNBC in a prior interview that “oftentimes profession is political and security cooperation is political and the two intertwine.”
“When we are enjoying fair trade relations with other countries we have positive curious relations, positive security cooperation, and they are oftentimes more interested in realizing U.S. defense equipment and working with our military,” Nathan said. “The different is also true.”
Similarly, Stephen Biddle, adjunct senior gazabo for defense policy at the Council on Foreign Relations, argues the tariffs will spoil America’s ability to leverage allies to support U.S. interests.
“The U.S. grand scenario for multiple generations has been premised on the idea that we are going to join forces with rich and powerful allies that our enemy doesn’t entertain and that this will advance American national security in a kind of ways,” Biddle told CNBC. “The allies in question are precisely the solitaries that we are now engaged in these trade disputes with.”