Tuesday, 02 January 2024 12:17 GMT

Trump Urged Not To Impose Aircraft Tariffs


(MENAFN- Pajhwok Afghan News)

KABUL (Pajhwok): Five countries, the European Union (EU), and several major airlines have urged the Trump administration not to impose new national security tariffs on imported commercial aircraft and parts.

According to a Reuters report citing a document released Tuesday, Canada, China, Japan, Mexico, Switzerland, and the EU expressed concerns about the potential fallout from such tariffs on the global aviation industry.

Airlines and aircraft manufacturers have been lobbying President Donald Trump to uphold the tariff-free regime established under the 1979 Civil Aircraft Agreement.

This agreement has contributed to an annual $75 billion trade surplus for the US aviation sector.

US aircraft giant Boeing referenced a trade deal reached in May with the United Kingdom that guarantees tariff-free treatment for airplanes and parts.

“The United States should ensure duty-free treatment for commercial aircraft and their parts in any negotiated trade agreement, similar to its efforts with the United Kingdom,” Boeing stated in a filing to the US Commerce Department.

Mexico said exporting $1.45 billion worth of aircraft parts to the US in 2024, representing about 10% of its total exports in the sector.

Meanwhile, the EU noted it imported approximately $12 billion worth of US aircraft, while exporting about $8 billion in aircraft to the US

In early May, the US Commerce Department launched a“Section 232” national security investigation into imports of commercial aircraft, jet engines, and parts-a move that could pave the way for additional tariffs.

“No country or region should attempt to support the development of its domestic aircraft manufacturing industry by suppressing foreign competitors,” the Chinese government wrote in its submission.

The Trump administration has already imposed 10% tariffs on nearly all aircraft and parts imports.

Last week, Delta Air Lines and several major industry trade groups cautioned that additional tariffs could raise ticket prices, disrupt supply chains, and undermine aviation safety.

Robin Hayes, CEO of Airbus Americas, echoed those concerns:“Current U.S. tariffs on aviation are putting domestic production of commercial aircraft at risk. It is not realistic or sensible today to create a 100% domestic supply chain in any country.”

Boeing added that it has significantly increased the US content in its aircraft over the past decade. Its latest models-the 737 MAX 10 and 777X-are expected to contain more than 88% domestically sourced components.

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