Politicians advised to request waiver of tariffs for airplanes and engines
Aerospace Industry Fights to Stay Tariff-Free as Trump's Levies Loom
In the face of Donald Trump's tariffs, the aerospace sector is assuming a defensive stance, seeking exceptions from US tariffs on civil aircraft and engine parts. The UK's aerospace supply chain, already struggling, is at risk if these measures are implemented, according to Aerospace, Defense, and Space Association (ADS).
Manufacturers and airlines are duking it out over who bears the brunt of the added expenses caused by Trump's tariffs. Airbus, for instance, declared that it won't shoulder the cost of tariffs on its planes imported by American airlines on a recent Thursday. On the other hand, Ryanair, Europe's largest airline and the biggest Boeing client, hinted at delaying deliveries from their US supplier if prices skyrocket.
The aerospace industry has sketchy terrain to navigate, given it has been largely free from trade barriers for about the last four decades. ADS cautioned, "Be wary of shifting tides in the US's erratic trade policy as it may stir up further uncertainty, particularly for long-haul programs and cross-border component flows."
ADS pleaded with the UK Government on Friday to pursue exemptions for civil aircraft, engines, and components as part of trade negotiations. A 73% increase in aircraft orders in Q1 2025 and a record-breaking backlog of 15,954 aircraft from the beginning of March signal a thriving market. But Trump's announced liberation day may have sidetracked this growth.
The UK industry's quarterly backlog stood at a record-breaking £254bn as of 31 March, an increase of 1% from last year.
While discussions regarding an economic deal between the US and the UK are in progress, the government remains tight-lipped about the details or timelines—stating that a trade war is not in anyone's best interest. The government spokesperson added, "Our diplomacy will remain measured and aim to reach a resolution that alleviates pressure on UK businesses and consumers."
Enrichment Insights:- The UK and US have negotiated an agreement that exempts the aerospace sector, valued at roughly £40 billion, from US tariffs, including Rolls-Royce aircraft engines and similar aircraft components[2][4].- With this deal, the aerospace industry will enjoy zero tariffs, which, in turn, aims to lower costs for UK aerospace exports to the US market[2].- The agreement also encompasses reduced tariffs on UK-manufactured cars and exemptions for steel and aluminum, alleviating overall industrial export pressures and benefiting the aerospace supply chain by ensuring access to critical metals at lower rates[1][3][4].- The UK government frames the deal to prioritize the UK aerospace supply chain, positioning it as essential to US defense and aerospace platforms, thereby encouraging US tariff concessions[4].
- The Aerospace, Defense, and Space Association (ADS) urged the UK Government to secure exemptions for civil aircraft, engines, and components, as these sectors are crucial for the UK's thriving aerospace market, which is valued at approximately £40 billion.
- With the aerospace sector being exempt from US tariffs, the UK can potentially lower costs for its aerospace exports to the US market, given the industry's reliance on technology for the manufacturing of aircraft engines and component parts, such as those made by Rolls-Royce.
