Supreme Court Ruling Clouds White House Tariffs

The U.S. Supreme Court today struck down many of the tariffs that the White House has imposed over the past year under the International Emergency Economic Powers Act (IEEPA). The landmark ruling—by a 6-3 decision—had been anxiously awaited throughout multiple industries, including aviation. While many aircraft and associated products have been exempted over time, the aviation sector has grappled with the ramifications of tariffs on other components and materials and the unpredictability of their imposition over the past year.

In an opinion written by Chief Justice John Roberts, the Supreme Court determined that “the president has no inherent peacetime authority to impose tariffs. Nor are we persuaded that the dots connect from our wartime precedents…We hold that IEEPA does not authorize the president to impose tariffs.”

The ruling, however, raises questions such as whether the White House will pursue other avenues to impose tariffs in other ways or different trade measures. Also in question is whether tariffs already levied will be repaid and whether trade agreements negotiated with countries seeking to avoid more punitive tariffs might be renegotiated. President Donald Trump called the decision “deeply disappointing” and indicated that there may be more to come: “We have alternatives.”

He maintained that the decision doesn’t substantially alter a president's ability to impose tariffs. It just means presidents can’t use IEEPA for them. “We will be able to take in more money,” he said, and noted that he would use other means to impose a new 10% tariff. Trump was unsure about the potential for reimbursements, saying that would likely get tied up in the courts for years.

NBAA, meanwhile, has scheduled a webinar to discuss what the ruling means for business aviation. That will be held on Monday, February 23 at 2 p.m. “We are reviewing the Supreme Court’s ruling to understand its full implications,” said NBAA President and CEO Ed Bolen, adding that the association is also carefully following the administration's response.



“Since the implementation of the Agreement on Trade in Civil Aircraft in 1980, the United States has dominated every aspect of civil aviation and enjoyed a massive trade surplus, bolstering the nation’s global leadership in aerospace safety and innovation, delivering a $100 billion trade surplus and millions of jobs,” Bolen added, noting the aviation industry contributes 9.4 million jobs, $1.8 trillion in total economic activity, and contributes 4 percent of U.S. gross domestic product.



“The benefits of the nation’s long-standing policy on aerospace trade accrue to business aviation, a vital link in our nation’s transportation system, a powerful driver of our economy, and a critical component of America’s leadership in manufacturing, innovation and competitiveness,” Bolen said.

During the General Aviation Manufacturers Association (GAMA) annual State of the Industry press conference on Wednesday, industry leaders reiterated their concerns surrounding tariffs, despite the exclusions that had been extended to the sector.

GAMA president and CEO James Viola noted how the industry, which had enjoyed a zero-tariff environment since 1979, mobilized after tariffs were first rolled out. “We are pleased that announced trade deals have supported and fostered the health and growth of the aerospace industry,” Viola said, adding that the industry was continuing to advocate for deals to provide stability, including eyeing the upcoming U.S.-Mexico-Canada trade negotiations.

Phil Straub, executive v-p and managing director of the aviation division at Garmin International, agreed that for tariffs, “We’ve kind of got that resolved for the aerospace products.” But he emphasized that the components aerospace companies buy are still subject to tariffs. “So, if nothing else, just better predictability and stability there is helpful for us. Ideally, they would go away.”

For international companies, tariffs have taken a toll. Swiss manufacturer Pilatus Aircraft paused deliveries to the U.S. for a period as a result, and other OEM leaders have noted the harm tariffs were causing throughout the supply chain and the resources necessary within each company just to manage them.