MW General Dynamics CEO on Trump tariffs: Don't ask

By Tomi Kilgore

CEO Phebe Novakovic said she won't know what the actual tariffs will end up being for a while, so any comment would be 'sheer speculation'

"I do not intend to answer questions on the subject of tariffs because anything I say on that subject, given our lack of knowledge, will almost certainly be wrong."

That was General Dynamics Corp. $(GD)$ Chief Executive Phebe Novakovic, speaking on conference call with analysts following the release of the aerospace and defense company's first-quarter results.

Novakovic's reasoning, according to a FactSet transcript, was that the scope and breadth of tariffs - both those put in place by the Trump administration and retaliatory tariffs enacted by other countries - won't be known for a while, so anything she might say on the subject would be "sheer speculation."

The CEO did say that while it can't yet be determined how tariffs will affect the company's defense business over the longer term, the impact on the greater aerospace business could be significant. That's because the aerospace industry is a "net provider of export revenue to the U.S."

General Dynamics' stock fell 3.7% in afternoon trading Wednesday. Although the company beat first-quarter profit and revenue expectations, the stock was on track to decline on the day earnings were reported for a fifth straight quarter.

Novakovic's reluctance to estimate the potential costs of tariffs and to provide guidance - "We never update guidance at this time of the year," she noted - came after a day after a couple of General Dynamics' rivals chose to do just that.

GE Aerospace $(GE)$ said on Tuesday that it estimated a $500 million cost from tariffs in 2025, while RTX Corp. $(RTX)$ estimated a total cost this year of about $850 million. Both companies kept their previously provided full-year financial guidances intact.

And while Boeing Co. $(BA)$ didn't provide a cost estimate or a full-year outlook, it said that due to tariffs, many of its customers in China have said they will not take delivery of aircraft.

General Dynamics' stock has edged up 0.6% in 2025, while the iShares U.S. Aerospace and Defense ETF ITA has gained 3.5% and the S&P 500 index SPX has dropped 8.3%.

-Tomi Kilgore

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April 23, 2025 14:36 ET (18:36 GMT)

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