Aircraft targeted for possible tariffs

The U.S. Department of Commerce has opened an investigation into commercial aircraft, engines, and aircraft parts, which could lead to the imposition of tariffs.

In a notice published Friday in the Federal Register, the Department said Commerce Secretary Howard Lutnick initiated the investigation on May 1 under Section 232 of the Trade Expansion Act of 1962.

Although the investigation process began on that date, it was not publicly disclosed before then.

In 2024, the United States imported $57.719 billion worth of aircraft parts and aerospace products, representing a year-over-year increase of 11.7%, according to data from the Department of Commerce.

Mexico ranked sixth in these shipments, with $3.125 billion, an annual increase of 9.8%.

Among other objectives, the research will determine current and projected demand for commercial aircraft and jet engines, and commercial aircraft and jet engine parts, in the United States, as well as the extent to which domestic production of these products can meet U.S. demand.

It will also focus on the role of foreign supply chains, particularly major exporters, in meeting demand for those same products in the United States.

The Department of Commerce is also particularly interested in receiving comments regarding the concentration of U.S. imports of commercial airplanes and jet engines, as well as commercial airplane and jet engine parts, from a small number of suppliers, and the associated risks.

Ahead of Mexico were exports of aerospace industry parts and products from Canada ($13.151 billion), France ($9.973 billion), Germany ($7.435 billion), the United Kingdom ($5.983 billion), and Japan ($3.662 billion).

In February 2024, leading aerospace companies, including aircraft, engine, and airline manufacturers, formed the Aviation Supply Chain Integrity Coalition. Its goal is to prevent unauthorized parts from entering the supply chain and strengthen safety and reliability in the aerospace industry.

Furthermore, these measures are expected to help prevent unapproved components in the aerospace and defense sector. They will also identify areas for improvement in logistics operations by 2025.

Deloitte considered these supply chain issues likely to persist into 2025. “As global trade dynamics change and the share of international trade with the United States shifts to countries like Mexico, aerospace and defense companies are expected to focus their efforts on improving their supply chain visibility,” it said in a report.

By 2025, he added, this may mean more companies employing digital technologies to track the flow of materials from upstream suppliers.