Story ID: 
Aviation Groups Urge Exemption from Tariffs
By: Kerry Lynch
Caption: Groups asked for meeting with administration officials to discuss supply chain risks
Word Count: 464
As 25% steel and aluminum levies take effect this week, a broad swath of aviation organizations are appealing to the Trump Administration to consider an exemption for aerospace from tariffs to ensure there are no unintended consequences. In a letter sent on Wednesday to Transportation Secretary Sean Duffy, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer, 15 U.S.-based aviation organizations urged a meeting to discuss the state of the industry and the complexities of the supply chain.
Pointing to a report on the risks of the supply chain, which involves tens of thousands of suppliers from all over the globe that cannot be easily replaced or substituted, the organizations wrote, “It is essential that both the government and industry work together to minimize cost and availability disruptions in the aviation supply chain.” The letter also points to the importance of bilateral safety agreements.
This letter came a day after the White House implemented the 25% metals tariffs but also vowed (and then rescinded plans) to double those tariffs on Canada in particular. Business aviation leaders have been trying to dig into the details of the implementation of the tariffs, but the situation is constantly shifting.
“The tariff landscape is incredibly fluid, dynamics are changing by the day and even by the hour...it’s incredibly unpredictable, and there’s lots of questions unanswered as we wait for further guidance from the government agencies responsible for these policies and from the White House,” said Kristie Greco Johnson, senior v-p of government affairs for NBAA, during a webinar that NBAA hosted on tariffs on Tuesday. But she added that the association was hoping to provide a little more clarity on them through the webinar.
Earlier this month, the White House implemented 25% tariffs on Canada and Mexico and doubled tariffs to 20% on goods from China. However, last week, it also paused for a month tariffs on goods that fell under a previous U.S., Mexico, and Canada (USMCA) trade agreement negotiated by the first Trump Administration.
Aircraft and gas-turbine engines should be covered by the exemption, said Jonathan Epstein, a partner with the law firm Holland & Knight, during the webinar. This includes both new and used. But Epstein noted that the situation is a little more complex for parts, and details still need to be ironed out; other questions remain, such as application to upgrades and MRO services.
Making this more complicated, he said, are U.S. Customs aerospace policies that were largely designed for an industry that operated without tariffs. This leaves gaps in application. However, companies must certify that their products qualify under the USMCA exemption, and Greco Johnson added that manufacturers are anxious to facilitate that process.