Leeham News and Analysis
There's more to real news than a news release.
US Transpo Secretary supports zero tariffs on aerospace, but change isn’t assured
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By Scott Hamilton
July 7, 2025, © Leeham News: US Transportation Secretary Sean Duffy wants to return to aerospace’s zero-tariff agreement, dating to 1979, but cautioned that doing so requires a larger trade agreement between party governments.
Currently, the US has a minimum 10% to 25% tariff on aerospace imports from the European Union and Canada, with much higher fees in some cases. The EU is prepared to impose reciprocal tariffs on the US.
Tariffs have major implications for Airbus and Boeing. Although Airbus assembles A220s and A320/321s at its US Mobile (AL) plant, fuselages, wings and other components are imported into the US from Canada (A220s) and the EU (A320/321s).
Boeing exports planes to the EU, which includes 28 countries. Boeing has more exposure than Airbus.
Components imported by Airbus or Boeing for inclusion in the airplanes are also subject to tariffs.
A Boeing spokesperson told LNA that it can recapture tariffs on important components that are on aircraft subsequently exported. But this ignores the overarching tariffs the EU may apply to the completed airplane.
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Christian Scherer, CEO of Airbus Commercial. Credit: Airbus.
In advance of the Paris Air Show, Airbus said that it’s going to adjust to US-imposed tariffs.
Responding to a question if it “made sense” for the Mobile plant to assemble A220s and A320/321s at the present rate given the impact of the tax, Christian Scherer said there will be no change. Airbus will live with the situation as it evolves. Scherer is the CEO of Airbus’s commercial operations.
Embraer downplays tariff impact on 2025 results
May 6, 2025, © Leeham News: Embraer CEO Francisco Gomes Neto sought to reassure investors on Tuesday, emphasizing the limited effect of new U.S. tariffs on the company’s operations as its Q1 2025 results were published.
“Our initial analysis points towards limited impact and we remain confident in and reiterate our 2025 guidance,” Gomes Neto said. He added that the company is “working on initiatives to limit impact of U.S. tariffs on our business.”
Gomes Neto credited the resilience in part to its high U.S. content, with Embraer aircraft incorporating substantial American-sourced components and systems—a factor that helps blunt the impact of cross-border tariffs.
But he added: “We join other companies in calling for a return to zero tariffs… for a highly globalised industry.” Read more
China bans Boeing, US parts imports in tariff war
April 15, 2025, © Leeham News: It was inevitable: China has banned its airlines from accepting deliveries of Boeing airplanes.
The move is in retaliation against President Donald Trump’s boosting tariffs on Chinese goods to 145%. Beijing placed retaliatory tariffs on US goods to 125%. During the first Trump administration, the president placed tariffs of 25% on Chinese goods imported to the US. Beijing has allowed delivery of very few Boeing jets since then.
Illustration of many of the systems and components COMAC sources for its C919 jet. The smaller C909 regional jet is similarly sourced. Credit: Airframer.com.
The move once more blocks Boeing from the world’s second biggest aviation trade market. Additionally, Beijing blocked the import of US-made parts, according to Bloomberg News, which first reported the actions.
Uncertainty plagues airline, aerospace, lessor industries over tariffs
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By Scott Hamilton
April 10, 2025, © Leeham News, Seattle: The airline and aerospace industries are plagued by uncertainty over the global tariffs announced by US President Donald Trump on April 2. The 90-day pause on nearly all tariffs announced yesterday doesn’t resolve the uncertainties. For the moment, they are only postponed.
Airbus’s A320 production plant in Hamburg, Germany. Credit: Leeham News.
Airframe and engine manufacturers, suppliers of components feeding them, and Buyer Furnished Equipment (BFE) directly to the airlines, lessors, aftermarket maintenance companies, and freighter conversion firms have many questions and no answers in chaos following Trump’s global tariff scheme.
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Consider the unknowns:
- Will Trump tax the entire value of airplanes, engines, and components imported into the United States or just the foreign content? There is no guidance yet.
- Will other jurisdictions, notably the European Union, announce reciprocal tariffs? This is unknown because the Trump Administration hasn’t clarified what will be taxed.
- How will aircraft leased by non-US lessors be treated when US airlines are the customers? How will US lessors leasing to non-US airlines be treated? No answers.
- Contracts between lessors, airlines, Boeing, and Airbus don’t specifically address tariffs. Some airlines say they won’t pay tariffs because the contracts are silent. However, Boeing thinks there is a way to pass tariffs along. Airbus probably does, too.
- Over the last weekend, US-based supplier Howmet informed its customers it reserves the right to exercise the force majeure clause in its contracts to give it flexibility to suspend deliveries because of the tariffs. Other suppliers, including some engine companies, are following suit.
- At least one supplier has already billed some customers for delivered goods, including a tariff tax line item on the invoice.
- How will various jurisdictions treat aircraft converted into freighters with a mix of US and foreign content? There is no answer.
The US-based law firm Vedder Price issued its opinion and guidance on Tuesday on some issues.