Rolls-Royce Holdings PLC (LSE:RR.), the British engineering giant best known for its aircraft engines, is unlikely to suffer much from Donald Trump’s latest round of tariffs, according to analysts at Citi.
While trade wars have rattled companies with strong links to the United States, Rolls' exposure to the American market is relatively small.
The key reason? Most of its commercial engine business is focused on Europe and Asia rather than the United States.
According to Citi, only about 8% of its latest wide-body aircraft engine deliveries — those designed for large, long-haul planes — went to America's airlines last year.
Meanwhile, just 7% of Rolls-Royce’s Trent engine fleet is based in the United States. With no alternative suppliers for spare parts and airlines locked into long-term engine deals, any disruption from tariffs is expected to be minimal.
Defence accounts for around 70% of Rolls-Royce’s US business, but Citi believes this is largely unaffected since production for military contracts happens over in the States.
The biggest question mark is the Power Systems division, which makes engines for ships, trains, and industrial uses.
It accounts for about a quarter of Rolls' overall business, but Citi estimates that only 10–20% of that is linked to the United States — equating to just 2.5–5% of group revenue.
While this part of the business operates on shorter order cycles and could be more exposed, Citi does not expect any tariff-related impact to be significant.
Overall, Rolls-Royce’s reliance on non-US markets means it is better shielded than many from escalating trade tensions. With a strong order book and limited alternative suppliers, the company appears well-placed to weather any tariff turbulence.
At 591p, the shares have been unaffected by the recent trade turmoil instigated by the new US president, who has threatened Canada, Mexico and China with protectionist levies.