The aviation industry—a critical pillar of global connectivity and economic growth—is facing significant challenges due to the Trump administration’s tariff policies implemented in early 2025. These tariffs, targeting major trading partners such as Canada (25%), Mexico (25%), and China (up to 145%), along with a baseline 10% levy on most other countries, have introduced unprecedented uncertainty and cost pressures across the aviation value chain. This KBRA report examines the multifaceted impact on airlines, original equipment manufacturers (OEM), and aircraft lessors, drawing on recent developments and industry responses.
Key Takeaways
- Tariffs on steel, aluminum, and goods from Canada, Mexico, and China raise production costs for aircraft and parts, with an estimated annual cost increase of up to $5 billion for the U.S. aerospace industry.
- The complex global supply chain—reliant on specialized and regulated suppliers—face disruptions due to tariffs, as components cross…