Story ID: 
U.S.-EU Trade Deal Spares Aerospace from Tariffs
By: Charles Alcock
Caption: Agreement avoids 15% tariffs that go into effect for other products on August 1
Word Count: 710
Aircraft and aviation parts will be exempt from tariffs under the U.S.-European Union trade agreement announced on Sunday by President Donald Trump and European Commission President Ursula Von der Leyen. From August 1, most other EU imports to the U.S. will be subject to a 15% tariff, but a 50% tariff will be charged on aluminum and steel.
Both NBAA and GAMA welcomed the “zero-for-zero” agreement for the aerospace sector, with both organizations having lobbied the Trump administration on this point. The exemption mirrors the terms previously agreed in a trade deal between the U.S. and the UK in late June.
In the run-up to President Trump’s August 1 deadline for reaching a deal, the EU had faced 30% tariffs. Sunday’s agreement with the EU ends the 10% tariff on aircraft and aviation parts imposed by the U.S. earlier this year.
“We commend the Trump Administration and EU Commission officials for working together to support the civil aerospace supply chain and foster the health and growth of the aerospace industry,” commented James Viola, GAMA’s president and CEO. “The global success of the general aviation manufacturing industry drives innovation, enhances safety, and strengthens economic opportunity. This deal, along with the previously announced U.S.-UK Economic Prosperity Deal, will help provide stability for the industry and drive competitiveness.”
Concern over Whether Deal Will Stick
However, trade analysts have warned that the terms of the framework trade deal are not binding, with a Trump Administration official briefing reporters on Sunday that President Trump can increase tariffs on the EU at any point in the future. Under the agreement, over the next three years, the EU is required to spend at least $750 billion importing oil, gas, nuclear fuel, and semiconductors from the U.S., and also invest a further $600 billion in the U.S., including purchases of military equipment.
Europe’s ASD industry trade association indicated that it does not yet have complete information on what the requirements for buying U.S. defense technology might mean for the continent’s defense sector. It has recently stressed the importance of bolstering Europe’s industry, issuing the following comment: “Regarding defence procurement, which remains a Member State prerogative, ASD has consistently stressed that to avoid critical dependencies and safeguard Europe’s long-term security, it is vital that procurement decisions are evaluated on their full, long-term consequences. Only by investing in its own defense industry can Europe guarantee its security and strengthen its freedom of action over the long term.”
German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni welcomed the deal agreed upon at President Trump’s Turnberry golf course in Scotland. However, France’s Prime Minister, François Bayrou, described the agreement as a “dark day” for the EU, saying that it “resigns” European states “to submission.”
NBAA Welcomes ‘Level Playing Field’
NBAA welcomed what it characterized as a return to the 1979 Agreement on Trade in Civil Aircraft. The industry group said it has resulted in a $104 billion trade surplus for U.S. companies and the creation of 1.8 million American jobs.
“This decision restores a level playing field on trade, allowing for further innovation in aerospace, securing America’s global aerospace safety leadership, and growing the exceptional trade surplus the U.S. has enjoyed in this sector for decades.”
Brussels-based ASD echoed support for a deal based on the 1979 agreement. “A stable and predictable trade environment is a win-win for the entire globalized aerospace industry.”
The European group’s U.S. counterpart, the Aerospace Industries Association, welcomed the trade agreement, while adding that it saw the need for more work to be done to ensure that U.S. defense products are not excluded from the EU market. “Lowering trade barriers with our European allies—many of whom are our top trading partners already—deters our adversaries, deepens our relationships, and, ultimately, grows the American aerospace and defense workforce,” said AIA president and CEO Eric Fanning. “Trade deals that open markets drive innovation, competition, and create American jobs in all 50 states, and this deal will do just that by agreeing to zero-for-zero tariffs on commercial aerospace products.”