Bombardier's stock is set to face renewed selling pressure when markets reopen after the long weekend, as investors digest President Donald Trump's latest threat to ban the Canadian planemaker from selling jets in the United States. The shares have already entered bear market territory, sliding more than 27% from their 2025 peak of $378 in July to around $311.90.
Trump's threat faces significant obstacles
In a Truth Social post on Monday, Trump accused Canada of unfair trade practices and claimed the US has a large trade deficit with its northern neighbor. He also cited delays in approving Gulfstream jets, a competitor to Bombardier. While the US is indeed Bombardier's largest market, the president's ability to unilaterally impose a sales ban is far from certain.
Legal experts point out that all Bombardier aircraft sold in the US have already received certification from the Federal Aviation Administration (FAA). Moreover, the planes comply with the USMCA trade agreement that Trump himself negotiated during his first term. That deal was ratified by Congress, meaning any ban would likely require legislative approval.
Should Trump attempt to bypass Congress, Bombardier would almost certainly challenge the move in court. The president has already suffered notable legal defeats, including at the Supreme Court, over tariff actions. A ban would also likely provoke retaliation from Canada, potentially targeting US manufacturers like Boeing and Gulfstream, a subsidiary of General Dynamics.
US supply chain exposure
Bombardier's deep integration with the US economy could also blunt the impact of any ban. The company employs over 1,000 workers in the US and relies heavily on American suppliers for key components. Its engines come from Pratt & Whitney, GE Aerospace, and Honeywell, while other parts are sourced from Collins Aerospace, Parker Hannifin, TransDigm Group, and RTX.
Banning Bombardier would therefore hurt these US suppliers, creating political and economic backlash. Some analysts have dubbed this a potential "TACO moment" — an acronym for "Trump Always Chickens Out" — suggesting the threat may be more bluster than action.
Fundamentals remain solid
Despite the political noise, Bombardier's underlying business continues to perform well. In the second quarter, revenue rose to $2.15 billion from $2.03 billion a year earlier, driven primarily by its manufacturing segment, followed by services. Adjusted EBITDA also improved, climbing to $325 million from $297 million in the same period last year.
The company's order backlog and service business provide a degree of resilience, even if the US market were to face temporary disruptions. Investors may also recall that similar threats in the past have often been walked back after legal or diplomatic pushback.
Technical outlook
From a chart perspective, Bombardier's stock has broken below its ascending channel and is trading under the 50-day moving average. The Murrey Math Lines indicate the price has slipped below a major pivot point. In the near term, the stock could remain under pressure as the market reacts to Trump's comments. However, if the ban fails to materialize, a rebound toward the $343 pivot reverse level is possible.
For context, broader market sentiment has been influenced by recent trade tensions and stronger-than-expected jobs data, which have also weighed on gold prices. Meanwhile, other industrial names have faced similar volatility, as seen in Tesla's recent slide.
Investors should watch for any official announcements from the White House or the FAA, as well as Bombardier's response. The company has not yet commented publicly on the threat.
This article is for informational purposes only and does not constitute financial advice.
