from Follow the Money

Maybe Airbus will make the A350 in America?

November 23, 2004

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

Airbus seems to be planning to update the A330 to compete with the Boeing 7E7. Civilian aircraft are (or perhaps were, Airbus is certainly gaining) the United States’ leading export. Maybe Airbus should consider following the advice of the Deputy Governor of the People’s Bank of China, who seems to think the US will remain a competitve base for glocal aircraft production.

"They [the US] should concentrate on sectors like aerospace and then sell those things to us [China] and we would spend billions on this. We could easily balance the trade."

One of my concerns about the trade deficit is that the US is borrowing tons of money from abroard, but not to invest in US export industries. Rather, we are selling Treasury bills to fund the government, securitized credit card debt (and other asset banked securities) to fund consumption, and agency debt (securitized mortgages) to fund investment in residential housing. If European capital wants to use US labor to produce for a global market, I am all for it ...

After all, producing the A350 in the US would be one way for Airbus to hedge v. the Euro/$.

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