HomeEconomyCustoms duties: how the American aerospace sector is mobilizing to escape it

Customs duties: how the American aerospace sector is mobilizing to escape it

Concerned about the measures established by Donald Trump, players in the aerospace sector seek to retaliate to save competitiveness.

The American aerospace sector sounds alarm. The airlines and industrialists are concerned about customs tasks provided by the Trump administration in commercial airplanes and spare parts, for fear of its competitiveness and its sector that has a commercial surplus comfort for more than 70 years.

“Impose generalized customs tariffs or non -customary obstacles for trade on the importation of civil aviation technologies would risk annihilating decades of industrial progress and damaging the national supply chain,” warned the Association of Aerospace Industries (AIA), in a letter addressed in the commercial minister Howard Lutnick in early June.

The Ministry was launched on May 1, at the request of President Donald Trump, an investigation to determine the opportunity to establish customs duties, from around 10% to 20%, in civil planes and spare parts, including engines. The interested parties had until June 3 to communicate their opinion.

The next day, during an audience in the Senate, Howard Lunick indicated that the United States should impose “new standards” in terms of customs duties in plane documents “at the end of the month.”

“It is essential to protect our industry and ensure that those who trade with us treat us fairly. I think we will use these tools to allow the improvement of the US industry,” he added.

However, for the AIA in terms of the Association of Airlines for America (A4A), the sector does not need this measure that, in reality, could have an opposite effect to what is requested.

According to her, exports of the aerospace and defense sector reached $ 135.9 billion in 2023, including 113.9 billion only for civil aviation. It generated a commercial surplus of $ 74.5 billion and invested 34.5 billion only in research and development.

An industrial base of 100,000 companies

The sector uses more than 2.2 million people in the United States, for an industrial base of more than 100,000 companies that produced almost $ 545 billion in 2023 and a contribution of 284 billion to the Gross Domestic Product (GDP).

It has benefited for almost fifty years from an International Agreement on Commerce (ACCA), which has reduced customs tasks and commercial barriers, the A4A recalled, in its response to the minister.

“The American commercial aviation industry embodies the success that President Trump is looking for,” he insisted, emphasizing that 84% of production was already American and that Washington “did not need to intervene in the remaining 16%.

“The current commercial system has strengthened our economic and national security and constitutes a crucial element to maintain our national security in the future,” he said.

For industrialists, these potential customs tasks would be a grain of sand that comes to take a well-greased machine for decades, and unbalance a sensitive and always convalescent supply chain after the Cavid-19 pandemic.

Competitive disadvantage

“Airplanes and spare parts already have a great demand and the supply is limited,” AIA warned, adding that the integration of new suppliers implies a “complex and expensive” process, which can last up to ten years due to the necessary certifications.

The Delta Air Lines airline also gave its opinion, arguing for a status quo, because these surcharges “hindered Delta’s ability to maintain his world group trajectory.” She would suffer a “competitive disadvantage” having to pay on parts more expensive than their foreign competitors.

If these customs duties were established, this “would inflict an unexpected tax on the purchases of Delta aircraft for several years.” Ed Bastian, his boss, had said at the end of April that he was “clear” that the group was not going to “pay customs tasks in any delivery of airplanes,” indicating “work closely with Airbus” to “minimize” the impact.

“Delta would probably be forced to cancel existing contracts and renounce contracts under negotiation,” he warned the company in his mail to the minister, currently underlining 100 planes that order Boeing and demand that his Airbus A220 be produced as a priority in Mobile (Alabama).

Author: HC with AFP
Source: BFM TV

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