Boeing, Others Hit With China Sanctions. What It Means for the Stocks.

China’s sanctions shouldn’t impact Boeing’s commercial jet business. (Photo by David Ryder/Getty Images)

Key Points

• China sanctioned 20 U.S. defense companies and 10 executives, including Boeing and Northrop Grumman, over U.S. arms sales to Taiwan.
• The U.S. agreed to sell Taiwan over $11 billion in weapons, including missiles, artillery, and drones, preceding China’s sanctions.
• Sanctions are largely symbolic, with little expected impact on U.S. defense stocks, as most do minimal business with China.

Boeing was among the U.S. defense companies hit with sanctions by China on Friday in response to the Trump administration’s decision to sell weapons to Taiwan.

China said it would penalize 20 U.S. defense companies and 10 executives, The Wall Street Journal reported. Boeing, Northrop Grumman, L3 Harris Technologies, and Anduril Industries’ founder Palmer Luckey were among the targets.

Boeing stock was up 0.2% in early trading Fridat, while Northrop has slipped 0.2%, and L3 Harris was up 0.2%.

The move comes after the U.S. agreed to sell Taiwan more than $11 billion in weapons, including missiles, artillery, and drones. The sanctions will likely have little impact on the stocks, given that most U.S. defense companies do almost no business with China. The sanctions on Boeing were only on its defense group and shouldn’t impact sales of its commercial jets, which explains why the stock is up a touch despite the news.

Though the move is largely symbolic, it signals China’s continued claim on Taiwan and the potential for the dispute over the island to turn into a full-scale war. The iShares MSCI Taiwan exchange-traded fund was up 0.4%.

Write to Ben Levisohn at ben.levisohn@barrons.com