Aerospace Industry Warns of Safety Risks from New Tariffs on Aircraft

The aerospace industry in the United States has issued a stark warning that new tariffs on imported commercial aircraft, jet engines, and components could jeopardize aviation safety and supply chains, potentially leading to unforeseen consequences. This warning comes in the wake of President Trump's announcement in April to impose tariffs on a wide range of imported goods, which has already put the aviation industry under significant strain. The U.S. Department of Commerce recently initiated a "Section 232" investigation into the national security risks posed by imported goods, which could result in higher tariffs on aircraft, engines, and components.

The Aerospace Industries Association, representing major companies such as Boeing, Airbus, Raytheon, GE Aviation, and hundreds of others, has urged the U.S. Department of Commerce to extend the public comment period for the Section 232 investigation by 90 days and to refrain from imposing new tariffs for at least 180 days. The association also called for further consultations with the industry to ensure that any tariffs imposed under Section 232 accurately reflect national security concerns without compromising supply chains and aviation safety.

The Air Transport Association of America, representing major U.S. airlines such as American Airlines, United Airlines, and Delta Air Lines, has also expressed concerns that tariffs could lead to increased ticket prices and freight costs. The aviation industry is already grappling with the impact of tariffs on nearly all imported aircraft and components, which are subject to a 10% tariff. The potential for additional tariffs under Section 232 has raised alarms about the long-term viability of the industry and its ability to maintain safety standards.

In a related development, President Trump announced on May 30 that he would increase tariffs on imported steel and aluminum to 50%. This abrupt shift in tariff policy has added to the uncertainty and chaos surrounding U.S. trade relations. The situation has been further complicated by a series of court rulings that have called into question the legality of the administration's tariff measures. The U.S. Court of International Trade initially halted most of the tariff measures, but this decision was temporarily stayed by the U.S. Court of Appeals for the Federal Circuit. Subsequently, a federal court ruled that the president lacks the authority to impose tariffs under emergency powers, temporarily halting the implementation of tariffs for two companies.

This legal back-and-forth has become a recurring theme in the past two months, as the administration has repeatedly changed its stance on tariffs. In early April, the government announced retaliatory tariffs but then suspended them to create space for negotiations. During talks with the European Union, the administration initially threatened to end negotiations and impose tariffs but later reversed course and extended the deadline for talks. The unpredictable nature of U.S. tariff policy has created a sense of uncertainty and instability, both domestically and internationally.

Critics have described the legal battles over tariffs as a test of the limits of presidential executive power. Three judges from the U.S. Court of International Trade unanimously ruled that most of the new tariffs are illegal and that the president lacks the authority to impose them under the International Emergency Economic Powers Act. The White House, however, has countered that these unelected judges lack the authority to interfere with the president's decisions, even suggesting that such interference could hinder the president's ability to conduct sensitive diplomatic and trade negotiations.

The unpredictable nature of U.S. tariff policy has had far-reaching consequences. Trade experts believe that the U.S. is attempting to use tariffs as a lever to gain negotiating advantages, but the legal challenges have weakened the U.S.'s position in international talks. A Filipino official acknowledged that the court rulings have reduced the pressure on other countries to comply with U.S. demands. Even if the stay on the "halt order" is lifted, the case is likely to be appealed to the Supreme Court, further prolonging the legal battle and making it increasingly difficult for the administration to achieve its goals.

According to the Oxford Economics Institute, the effective import tariff rate in the U.S. was between 2% and 3% before the current administration took office, but it has since risen to around 15%. If the U.S. Court of International Trade's ruling is upheld, the tariff rate would be reduced to around 6%, but the stay on the ruling has left the tariff policy in limbo. JPMorgan Chase CEO Jamie Dimon has warned about the threat posed by "internal enemies" within the U.S., questioning whether the country can remain united in its actions, values, and management. The National Retail Federation's vice president, David French, has expressed concern that the lack of clarity in the court rulings will only increase uncertainty for businesses, making it more difficult for them to plan and budget.

Many U.S. businesses have expressed frustration with the constant changes in trade policy. The founder of a Utah-based home goods company, Dorai Home, lamented the difficulty of making informed decisions in the face of the administration's shifting trade policies. The company has had to delay the launch of several new products and lay off key employees as a result. The latest data from the U.S. Department of Commerce shows that U.S. corporate profits fell by 1181 million in the first quarter of this year, the largest decline since the fourth quarter of 2020. If tariffs continue, the losses are expected to worsen.