Lockheed Martin CEO: Foreign defense customers unlikely to retaliate against us due to Trump tariffs

Key Points
  • Lockheed Martin CEO Marillyn Hewson wants to "wait and see" about the impact of Trump's tariffs, but she's optimistic her foreign customers won't go away.
  • "I would suspect that their first order is to protect their citizens," she says.
  • However, Hewson says the company's supply base, some of which is located outside the U.S., is "critically important."
Lockheed Martin CEO on tariffs: The administration has a responsibility of looking at what the impacts are

It's too soon to know the impact of President Donald Trump's proposed tariffs on Lockheed Martin's business, the defense contractor's CEO, Marillyn Hewson, told CNBC on Monday.

However, she said the company's supply base, some of which is located outside the U.S., is "critically important"

"We're going to have to wait until the details come out before we can really get to any specific impact on our programs," Hewson said on "Power Lunch."

Marillyn Hewson, the Chairman, President and Chief Executive Officer of Lockheed Martin.
Carl Court | AFP | Getty Images

Trump's tariff talk has sparked fears of a trade war. On Thursday, the president announced the U.S. would enact tariffs of 25 percent on steel and 10 percent on aluminum.

It's unclear who would be subject to the tariffs, although on Monday Trump signaled he may drop them for Canada and Mexico if they can renegotiate a new NAFTA deal with the U.S.

Lockheed Martin produces the F-35 aircraft for the U.S. military. There are 170,000 jobs in the F-35 program in the U.S. alone, plus there are other countries developing products and components for the aircraft, Hewson said. For example, the horizontal tail is made in Canada.

There is also the issue of international customers.

Remy Nathan, vice president for international affairs at the Aerospace Industries Association, told CNBC last week that often trade and security cooperation intertwine.

"When we are enjoying good trade relations with other countries we have positive foreign relations, positive security cooperations, and they are oftentimes more interested in purchasing U.S. defense equipment and working with our militaries," he said.

"The opposite is also true, and so those are real concerns that we have," he added.

International sales account for 30 percent of Lockheed Martin's business.

However, Hewson is optimistic that the tariffs won't result in retaliation from the company's foreign buyers because the work Lockheed Martin does primarily supports countries in their national defense.

"Generally we don't see them make those kinds of choices to not buy the products and capabilities they need to protect their citizens because of oil prices, or something of that nature, or tariffs," she said. "I would suspect that their first order is to protect their citizens."

— CNBC's Amanda Macias and Morgan Brennan contributed to this report.