Russia could stop exporting titanium to Boeing in retaliation to Trump sanctions

David Ryder | Bloomberg | Getty Images

A Boeing Co. 737 MAX 9 jetliner sits on the production floor at the company’s manufacturing facility in Renton, Washington, U.S., on Monday, Feb. 13, 2017.

The aircraft industry is increasingly reliant on titanium as a strong but lightweight material for use in wing assemblies, steering wheels, hydraulic systems and a number of other parts. A Boeing 777 has a reported 8.5 to 12 percent of titanium in its airframe.

Russia’s VSMPO-AVISMA is the world’s largest titanium producer and the main supplier to Boeing. The Russian firm told Reuters on Friday that stopping that trade could push the company out of emerging markets.

Boeing also has a joint venture with VSMPO-AVISMA’s parent company Rostec Corporation. The two firms run a plant in western Russia devoted to manufacturing finished parts for airplanes.

The trade-restrictive proposals from the Russian politicians are at an advisory stage and it remains to be seen if the Kremlin will adopt them into law.

In an email Friday, Timothy Ash of BlueBay Asset Management said the Russians were issuing Washington with a clear warning.

“I assume the reason they are not going straight to an imposition of sanctions is that they want to let the U.S. administration and its allies mull over the implications of further sanctions actions against Russia,” he told CNBC.

Boeing shares fell around 1.2 percent shortly after the open of trade. CNBC has contacted Boeing for a response but at the time of publication had received no reply.