US tariffs could put air safety at risk, aerospace and airline industries warn

Reuters
06-04
UPDATE 1-US tariffs could put air safety at risk, aerospace and airline industries warn

Adds trade group comments in paragraphs 3-5, more details in paragraphs 8-10

By David Shepardson

WASHINGTON, June 3 (Reuters) - New tariffs on imported commercial aircraft, jet engines and parts could put air safety and the supply chain at risk or trigger other unintended consequences, groups representing global aerospace companies and U.S. airlines warned on Tuesday.

The industry already faces 10% tariffs on nearly all imported planes and parts after U.S. President Donald Trump announced sweeping duties on trade partners in April. Last month, the Commerce Department opened an investigation known as Section 232 looking at risks to U.S. national security from imported goods, which could be used as a basis for even higher tariffs on imported planes, engines and parts.

The Aerospace Industries Association, which represents Boeing BA.N, Airbus AIR.PA, RTX RTX.N, GE Aerospace GE.N and hundreds of other companies, urged the Commerce Department in a filing to extend the public comment period on Section 232 by 90 days and impose no new tariffs for at least 180 days.

The group also urged further consultation with industry on "any Section 232 tariffs to ensure they accurately reflect national security concerns and do not put the supply chain and aviation safety at risk."

The AIA highlighted how a fire at a Pennsylvania aerospace fastener supplier in February has impacted production and the difficulties in sourcing parts from new suppliers.

"It may take up to 10 years to establish a new domestic supplier and ensure they meet necessary, rigorous safety certifications," the group wrote.

Airlines for America, the trade group representing American Airlines <AAL.O>, United Airlines UAL.O, Delta Air Lines DAL.N, and other major carriers warned tariffs could hike plane tickets and shipping rates.

"Injecting higher costs into the commercial aviation sector will weaken our economic and national security and have a material and debilitating impact on the domestic commercial aviation industry’s ability to grow, compete, innovate and invest," the airlines wrote in comments seen by Reuters that were filed with the Commerce Department.

The tariffs could dismantle the recovering aviation supply chain, result in more counterfeit parts entering the market and result in a cascade of challenges and unintended consequences, the trade group said.

Airlines and manufacturers have been lobbying Trump to restore a tariff-free regime under the 1979 Civil Aircraft Agreement, in which the U.S. sector enjoyed a $75 billion annual trade surplus. According to the agreement, parts must be certified by the Federal Aviation Administration to be deemed tariff-free.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Nia Williams)

((David.Shepardson@thomsonreuters.com; 2028988324;))

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