US-Canada Tariffs: Aerospace Industry Weighs Impact
The imposition of tariffs on Canadian plane parts and jets by the US has raised concerns within the North American aerospace industry.
Call for Tariff Pause
Brian Bryant, head of the International Association of Machinists and Aerospace Workers (IAM), urged the US government to pause tariffs on Canada, similar to its delay with Mexico. He emphasized the potential job losses for US workers who export aerospace goods to Canada.
Impact on Planemaking
Tariffs could disrupt the tight supply chain in planemaking, leading to increased costs and complexity. Canada exported over $10 billion worth of aerospace products to the US in 2023.
Bombardier's Reaction
Bombardier, a Canadian business jet manufacturer, saw its shares drop significantly following the tariff announcement. The company is assessing various scenarios to mitigate the potential fallout.
Unclear Duration and Uncertainty
The duration of the tariffs remains unclear, making it challenging for businesses to plan. The ongoing trade war is also putting pressure on the aerospace supply chain, especially for Boeing, a major US exporter.
Passing on Costs
Companies that purchase aluminum from Canada may have to pass on increased costs to planemakers due to limited capacity and supply chain issues.
Business Jet Sector Impact
Analysts warn that the business jet sector could be severely affected if tariffs persist. RTX's Pratt & Whitney Canada manufactures engines for certain Gulfstream and Textron business jet models.
Aerospace Industries Association's Concern
Dak Hardwick of the Aerospace Industries Association expressed concern about the potential impact of tariffs on the positive trajectory of the US aerospace export industry.