Due to tariffs recently announced by the Trump administration, costs in aerospace manufacturing — including airplane production — could increase.
According to CNBC News, the United States’ tariffs could jack up the price of aerospace products, for which the country is a leading exporter. In early April, Trump set a 10% import tax on America’s trading partners, with some countries facing up to 50%.
Regarding how the tariffs will impact the aerospace and aviation industry, the taxes move the U.S. away from the 1980 Agreement on Trade in Civil Aircraft. The latter “eliminates import duties” on non-military aircraft, aircraft engines, aircraft parts, and other related components. Countries that signed the agreement, in addition to the U.S., include the United Kingdom, Canada, China, and more.
“This [aerospace] is the one manufacturing sector where America has, has enjoyed a tremendous trade surplus,” said Managing Director at AeroDynamic Advisory, Richard Aboulafia, according to CNBC News. “So the idea of fighting a trade war for this industry, it’s living in a crystal palace hurling giant boulders.”
What Else Should Flyers Know About The Potential Rise In Aerospace Production Prices?
Trump’s tariffs could strain an already struggling, post-COVID aerospace parts supply chain. The import taxes could impact the prices of steel and aerospace parts needed in the U.S. from other countries. Boeing and Airbus could be affected, as they both manufacture aircraft in the U.S.
“There’s no such thing as a national jet,” said Aboulafia, highlighting the globality of the aerospace manufacturing industry.
“It certainly makes things more expensive for the industry,” Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, reportedly commented on the tariffs. “It doesn’t matter who owns the company. If an item crosses the border, it will have to be paid by [the] importer of record.”
