Bombardier (BDRBF, Financial) is walking a tightrope as Canada reconsiders its $19 billion deal for 88 F-35 fighter jets from Lockheed Martin (LMT, Financial). CEO Eric Martel isn't mincing words—he's worried that if Canada pulls back, Washington could hit back by targeting Bombardier's U.S. defense contracts. That's a serious risk, given that 60% of the company's revenue flows from the U.S. With President Trump doubling down on tariffs, including fresh 25% duties on Canadian steel and aluminum, Bombardier is caught in the crossfire. The company has deferred providing its financial guidance for the year, citing trade war uncertainty.
The bigger problem? Bombardier's entire supply chain is deeply tied to the U.S. The flagship Global 7500 jet depends on American-made avionics, engines, and wings—components that could suddenly become a lot more expensive if new tariffs land. Meanwhile, Canada's new prime minister, Mark Carney, isn't backing down. His government is reassessing the F-35 contract to ensure it's in the country's best interest, but if it leads to broader trade retaliation, Bombardier could take a hit. With two-thirds of Canada's aerospace exports reliant on the U.S., any disruption could send shockwaves through the industry.
Despite the uncertainty, Martel is playing it smart. If U.S. tariffs bite, Bombardier could shift focus to non-U.S. customers, a move European rival Airbus (EADSY, Financial) has pulled off before. He also isn't convinced tariffs on its jets will stick. Still, investors aren't waiting around—Bombardier's stock has already dropped 18% since Trump's re-election. With the F-35 review still in play and trade tensions escalating, the stakes for Bombardier (and its investors) are massive.
