US ponders Russia sanctions, some affecting US aerospace

Oct. 27, 2017, © Leeham Co.: The US is considering new trade sanctions against Russia, and Russia is considering retaliatory sanctions, that could have major implications in US aerospace—including on Boeing.

The US sanctions would be for meddling in the US presidential election in 2016 and for activities in Eastern Europe. The Russian sanctions are a tit-for-tat retaliation if the US sanctions are adopted.

Among the Russian companies that may be targeted:

  • Rostec, the Russian Technologies State Corp. Rostec provides rocket engines to NASA for the US space program. The Pentagon spends about $2bn with Rostec.
  • Russian Aircraft Corp. MiG.
  • Russian Helicopters
  • Sukhoi Aviation, maker of the SSJ100, which uses major US components.
  • United Aircraft Corp., parent of Irkut, maker of the MC-21, which also uses major US components and the Pratt & Whitney GTF engine.
  • United Engine Corp.

Russia’s equivalent of the US Senate approved a law that will allow the government to retaliate with sanctions of its own against US interests. Additional approvals are required before implementation.

“In particular, Russia may restrict supplies of titanium to Boeing Corporation. Presently, titanium exports to the USA are operated by VSMPO-Avisma. According to various experts, the US aircraft construction industry depends on the export of titanium from Russia on the level of 40-60% of the total amount,” the state-run Pravda reports.

25 Comments on “US ponders Russia sanctions, some affecting US aerospace

  1. Before condemning Russia’s meager attempts at influencing the uninformed US populace, you must provide context. Ask the US voters if they can name the foreign nation that has its own lobby in Washington. Clue: It is one of the top 10 most powerful lobbies.

  2. The increase in nationalism and how it increasingly uses trade as a weapon has become alarming. The aviation industry, although not unique, is acutely vulnerable due to the global nature of the supply chain. As an OEM I am surprised there appears to be little concern or action to bring more of the critical elements, ie those for which there is no alternative within national boundaries or at least within boundaries that avoid antagonistic nations.

    I appreciate that certain material sourcing (e.g. titanium as mentioned) and multinational cooperation (e.g. engines) make this difficult. At the same time the risks to OEMs in the event of sanctions, trade wars or worse is potentially disastrous.

    • Agreed Russia should continue to shoot itself in the foot and work its way back into insolvency we saw at the end of the Cold War.

      • Where is the proof Russia intervened in US election?

        This is hipocritical

        Are you telling me the US has no medling in elections around the World

        Look in the mirror guys

        AJK

  3. @sowerbob: While I agree nationalism is an issue, in this case its more the Cold War II that has been started.

    I am enough of a history reader (maybe more than enough) to understand Russian propaganda in regards to Western Intentions.

    Like all good propaganda it has a kernel of truth, but its taken from events 100 yeas ago, as well as the “We Stood Alone Against the Nazis” of 50 years ago.

    And Russia did suffer beyond horribly from the Nazi invations. What they don’t tell their citizens is that invation was aaided and abbettede by giving Germany huge amounts of starteci material (brides) as well as eanlin German Tank and aircraft work in the Sovieyt Union prior to the Great War.

    Or more so, agreeing to stab Poland in the back when they had a pact with those same Nazis.

    The West can barely get out of its way, it cetritnaly is not a threat to Russia via invatiobns. Pop rock, heavye metal etc yes.

    When someone advialy engages in corrping the voting system and poisibly having changed an election (we probably can never prove that part) then yes a democracy gets nerfouc”

    Boeing shold never have put themselves at such risk.

    They have seen the new Soviet Union seize assets worth 10s of billions from oil companies that joint ventured, they certainly know what Putin is up to.

    So this goes far beyond nationalism, do we support and aid and abet the NSV in trying to destroy us?

    Buying rocket engines from them?

    Depending on them for Space station access ?

    Is that the US my parents generation defended in WWII?

    • Hi TW

      I was looking at it from all sides, Boeing is beholden to other countries as is Airbus to the US. I am not making any assertions against any state. All I am saying is that for other commercial reasons they have both put themselves at a very real risk that seems to be growing.

      Regarding Russian perspectives I agree that they have their view of the Second World War just as all countries have their own. I would argue that The US viewpoint is as skewed. I was surprised and quite humbled when visiting the Victory Park museum in Moscow to note the degree to which they acknowledged the contribution of lendlease to their cause from the US and Britain in a way that is not explicit when visiting similar US and British museums.

      Regarding events of a hundred years ago I was in Moscow a couple of weeks ago and no mention of the 1917 events were in evidence which I found quite strange. I don’t think communism is anything to do with this, in fact Mr Putin harks backs further to the power of Tsardom.

      All I am saying is that the dynamic has changed as can be seen by Trump, Brexit, Catalexit (sorry) and more. Large multinationals must take heed of this in terms of manufacture and sourcing going forward

      • Thank you, I will never see Moscow, if I could visit one place before I go, those memorial and battle fields would be it.

        The Russian people suffered beyond belief in WWII, that is sadly not recognized. I don’t know there are words that can being to convey the sacrifice. You saw that at Chernobyl when they ran the sanding missions, you won’t see anyone in the US do that.

        They truly can and are an inspiration of what sacrifice and courage really is.

        On the flip side, I detest Stalin and what he did and the gross distortion of the Allied War effort. Coldly it would have been in our best interest to barley keep him in the game so we could recover all of Europe. Ugly part of war we got took in and the mess that still lingers.

        I fully agree the Boeings of the world that have shaped and caused this in large part better think long and hard and plan better, and even better, contribute something other than their greed to the nation and treasury not just the share holders.

  4. NASA does not buy rocket engines from Russian

    The US governemtn does for the SLA of Boeing and Lockeeed.

    Its far past time that has stopped at last and with Space X a viable lift alternative they have not re-upped past the orders they have.

    Like Boeing, the US government is insane to ever have done that let alone trust the Russians as a reliable partner.

    Notice that Boeing is involved in this one as well.

    We don’t need Russian Rocket engines. We just need a government that is not sloppy lazy and stupid.

  5. It is increasingly obvious to the rest of the world that the US is not a reliable trading partner.

    • Its incredibly obvious that we have a Moron as POTUS.

      Short of a revolution that is not going to happen, we and the world are stuck with that.

      Our hope is Mueler brings charges, the house of representative turns over at the 2018 elections, he gets impeached.

      As the Senate is loosing viable Reptiailin cnadiates, they may also pull a tea party of the 2012? election and loose those seats as well.

      Trump is not the US. He is an ugly part of it and he and the reptilians are a repugnant bunch, but then all countries have that.

      If the rest of the free world had stepped up then some of this might not have come to pass either.

      Each person and country needs to look in the mirror.

      I do my best as an informed citizen both nationally and locally.

  6. Interesting- take the time to look at the recent ( this week ) Frontline on PBS re Putins revenge- and involvement of Clinton.

    Then keep in mind that the Perkins Coie ( Seattle ) law firm partner who ‘ hired’ Fusion – Steele is/was a strong democrat supporter. Many do not realize that Perkins Coie is a MAJOR Boeing corporate legal firm and has been for decades.

    Break out the popcorn- awaiting the next chapter in the continuing spy drama called Russiagate. This saga could never be published as a novel except under ‘outrageously improbable ” fiction genre- its way beyond lecarre and similar authors..

    • …” Fusion GPS was started by three former Wall Street Journal employees. The firm worked directly with Perkins Coie and its lead election lawyer, Marc Elias, according to the law firm spokesperson, who spoke on condition of anonymity to discuss sensitive information about confidential business relationships. The law firm’s payments to Fusion GPS for the Russia research ended just before Election Day, the spokesperson said.

      The spokesperson said that neither the Clinton campaign, nor the D.N.C., was aware that Fusion GPS had been hired to conduct the research.

      Earlier this year, Mr. Elias had denied that he had possessed the dossier before the election.”

      https://www.nytimes.com/2017/10/24/us/politics/clinton-dnc-russia-dossier.html

      • Don, it would be funny if not for the fact that there is some possibility that they actually influenced enough pole to swing the election from a not so attractive personality to a complete nut case.

        I am no Clinton fan, but she was an effective individual with a brain, a good place holder for a better system.

        • yep she and obama and holder and others made a great deal selling Uranium to Putin cabal .. Some may call it treason.

          Guess I need a case of 7 up to go with my stock in poporn-

          • US uranium cant be sold outside US. The Canadian company that Rosatom bought had a large mine in Kazahstan that they were interested in. Of course plenty of other countries supply uranium, its not exactly a scarce material.
            US uranium hasnt benefited any one in Russia

  7. The US and Europe were right to engage Russia in the 90′ when there was an air of change. Though Putin did lead in effect a ‘counter revolution’ of sort today, Russian people are now connected to the world much better than today.

    And aside from weapons tech or natural resources, Russia did/do not have much to trade with the rest of the world (still).

    75 years of deep communism, Stalin purges and atrocities before WWII (remember Ukraine?), and then WWII succeeded in killing much mercantile behaviors.

    You have to take the long view. Not 4, 5 or x year election cycles.
    The risk was and is limited. We have to remember that a few (large) engines is a drop in the aerospace bucket. Markets (SpaceX, etc) is making this right. They can’t compete with that long term. No chance.

    And just in this thread you have to see the power of disinformation…look at Don’s comment:
    “yep she and obama and holder and others made a great deal selling Uranium to Putin cabal .. Some may call it treason.”

    As Dukeofurl points out, in fact, the US never sent uranium to Russia. After the commies fell, we bought HUGE amount of surplus enriched uranium (cheap) from them to keep it out of there. This was reprocessed in our plants and sold to OUR nuclear reactors. Even the Russians agreed they had too much and it was too many. We even paid many salaries there to avoid having those engineers work for NK, China, the arabs/iranians.
    Could you ever imaging us selling uranium to them? Imagine the 24/7 channels…

    But turn that around… now according to Don’s….it’s all one side’s fault (‘that woman’, the ‘blacks’…ie, Obama/Holder). Using strong words even like ‘treason’
    Amazing 🙂 It shows you that if you have a megaphone big enough and enough folks spread it…it must be true.
    In fact, it’s a bit sad.

    And btw, any objective observer would tell you that aside from Moscow… Russia is not doing well as a country. Its going backwards. “We” are winning. Or the Chinese actually.

    Enjoy your weekend you all!

  8. duke of url said ” US uranium cant be sold outside US ”

    It has already been shipped out of the U.S via canada and ??? Thats a fact- documented –

    http://www.factcheck.org/2017/10/facts-uranium-one/

    In a June 2015 letter to Rep. Peter Visclosky, the NRC said it granted RSB Logistics Services an amendment to its export license in 2012 to allow the Kentucky shipping company to export uranium to Canada from various sources — including from a Uranium One site in Wyoming. The NRC said that the export license allowed RSB to ship uranium to a conversion plant in Canada and then back to the United States for further processing.
    Canada must obtain U.S. approval to transfer any U.S. uranium to any country other than the United States, the letter says.

    ++

  9. Well, I should have known better.

    None of the comments have anything to do with the post’s thrust that sanctions will affect US aerospace interests. This has descended into political commentary and gone off into WW II stuff.

    Unfortunately, I didn’t catch any of this until late Friday night, hours after posting.

    It’s disappointing that not one of you addressed the issues at hand: sanctions and the impact to aerospace and Boeing.

    Comments are closed.

    Hamilton