Trump Holds off on Aero Tariffs but Directs Negotiations

Concerned that the U.S. aerospace industry is overly reliant on imports, President Donald Trump signed a proclamation on Thursday directing the transportation and commerce department secretaries to enter into negotiations with other countries to ensure the U.S. industry “address the threatened impairment” to national security. However, at the same time, the proclamation also states that no “immediate” tariffs should be assessed in the interim.

According to the proclamation, the President may consider alternative remedies in the future. The secretaries are to report back on those negotiations within 180 days.

The proclamation stems from a study the Department of Commerce undertook on the effects of imports of commercial aircraft, jet engines, and associated parts on U.S. national security. In reporting the results of that study, the department advised that aerospace products “being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States,” according to the proclamation.

Calling aerospace products essential to the U.S. security and economy, the proclamation notes that the sector is an important driver of jobs, supports national requirements, and also is critical for cargo, tourism, and transportation.

However, the industry is facing challenges meeting demand, according to the proclamation, and “These challenges are caused by, among other things, actions and practices of foreign countries, overreliance on foreign imports, and insufficient incentives to invest domestically.”

Further, the report found that actions of foreign countries continue to harm the commercial aircraft industry, eroding quality workforce, spurring industry consolidation, and causing increases in production costs, according to the proclamation.

In sum, the proclamation adds: “The United States aircraft industry is too reliant on foreign supply chains, raising national security concerns” and “without intervention, [this] will continue to harm the United States aircraft industry.”

As such, the proclamation concurred with the findings and said, “it is necessary and appropriate to enter into negotiations with trading partners to adjust the imports of commercial aircraft, jet engines, and their associated parts so that such imports will not threaten to impair the national security of the United States.”