$100 Billion at Risk: Tariffs Threaten U.S. Aerospace Industry's Trade Surplus

The U.S. aerospace industry, which softens the national trade deficit by over $100 billion annually, faces increased costs due to new tariffs. These tariffs, set at 10% globally with higher rates for certain regions, will impact the prices of Boeing and Airbus planes, GE Aerospace engines, and other aerospace products. Over the past decade, more than two-thirds of Boeing’s airplane orders came from international customers. The industry has historically operated under a 45-year-old trade agreement allowing duty-free trade, which these new tariffs threaten to disrupt. Imported steel and aluminum, crucial for airplane manufacturing, are also subject to separate sector-level duties. The tariffs could strain the aerospace supply chain, still recovering from Covid-19, and potentially increase costs for thousands of imported replacement parts. Shares of Boeing, GE, and airlines dropped following the tariff announcement.

Source: www.cnbc.com