Trump Tariffs Set Up Potential 'Nightmare' Scenario for Aircraft Manufacturing

Absolute cost of an airplane could increase by ‘single digits’ from duties on electronics systems alone, according to an industry analyst.

Caleb Revill

Friday, February 07, 2025 at 05:28 PM ET

Verified

Edited By:

Kimberly Johnson

Boeing sources approximately 700 suppliers around the world to support its best-selling 737 aircraft, which are each composed of about 2 million separate parts. [Credit: Boeing]

Key Takeaways:

New U.S. tariffs, especially the 10% tariff on imports from China now in effect, are projected to increase the cost of aircraft manufacturing due to its reliance on complex global supply chains.
Electronic components, which constitute 20-30% of an airplane's cost and often have a third of their materials originating from China, are expected to be most impacted, potentially leading to single-digit percentage increases in aircraft prices.
While tariffs on Mexico and Canada are currently delayed, their potential enforcement would also cause "ridiculously expensive" process changes and cost increases for key subassemblies manufactured in those countries.
The overall situation is highly uncertain, leaving aircraft manufacturers in a "wait-and-see" mode as they grapple with unknown impacts on demand, facility operations, potential reshoring, and the threat of retaliatory tariffs.

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As the global supply chain prepares to grapple with new and impending U.S. tariffs, one analyst is reviewing the implications for how increased costs will affect aircraft manufacturing—and what parts might be most impacted.

On Saturday, President Donald Trump signed an executive order to impose 25 percent tariffs on imports from Mexico and Canada, and 10 percent tariffs on goods from China. A detailed breakdown of what goods might be affected by the tariffs can be found here.