Airbus CEO Warns Of 'Very Strong' US Protectionism Under Trump

European aerospace companies are bracing for “very strong” protectionism in the United States as Donald Trump prepares to take office. Guillaume Faury, CEO of Airbus SE EADSY, voiced his concerns about the potential impact on the industry.

What Happened: Faury, who also leads France’s GIFAS aerospace association, noted that supply chains are still recovering from the pandemic’s disruptions, Reuters reported on Thursday. While the European aerospace sector is witnessing robust demand for commercial aircraft and increased defense spending, it faces challenges like overcapacity and job reductions in the satellite industry.

As Trump’s inauguration approaches, the industry anticipates a significant shift toward protectionism. Trump has previously threatened tariffs on foreign goods to prioritize American interests. Faury also pointed out the European defense sector’s struggle with financing shortages, despite ongoing conflicts such as the one in Ukraine.

He urged the French government, led by Prime Minister Francois Bayrou, to maintain support for research on emissions reduction and to ease corporate charges, warning against repeating past mistakes seen in other industries.

Why It Matters: The prospect of a Trump presidency has raised concerns in Europe about the potential for a new round of tariffs, which could trigger an economic recession. Analysts have issued pessimistic outlooks for European economic growth following Trump’s election victory.

Trump’s win has also sparked a “reshoring” rally, with stocks of companies focused on bringing production back to the U.S. surging sharply. This trend is driven by expectations of protectionist policies.

Furthermore, Goldman Sachs analysts have flagged a near 30% probability of market corrections due to rising inflation pressures, trade tensions, and political uncertainty ahead of Trump’s second term. These factors could lead to deeper market volatility and weaker forward returns for equities.

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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