Tariffs and Their Impact on the Aviation Industry

Following a fresh round of trade duties imposed by the US government, the aviation sector is anticipating major disruptions. Aircraft manufacturers and international airlines are already being impacted by these duties, which target items from important trading partners including China, Canada, Mexico, and the European Union. The aviation industry is especially at risk because of its heavy reliance on global supply chains and market access.

How Are Manufacturers Being Affected  

Boeing 

Boeing stands to suffer the most from the escalating trade tensions. With complex global supply chains, such as the Boeing 737 relying on roughly 2,000 parts from over 700 international suppliers, tariffs on key materials like aluminium and steel are increasing production costs by up to 25%. These parts often cross international borders multiple times, making tariff assignments both difficult and expensive. 

Wouter Dewulf, an aviation economist at the University of Antwerp, notes that Boeing is unlikely to pass these increased costs onto customers without affecting its competitiveness. "Boeing is likely to absorb these additional material costs, leading to higher production expenses and reduced profit margins per aircraft," he explains. 

Boeing also faces challenges in the Chinese market. With China’s major state-owned airlines expected to pivot toward Airbus and local manufacturer COMAC, Boeing risks losing access to one of the fastest-growing aviation markets globally. 

Two Boeing 737 MAX jets for Xiamen Airlines were returned from China to Seattle amid rising U.S.-China trade tensions. With tariffs sharply increasing aircraft costs, Beijing has reportedly halted Boeing deliveries, signalling broader disruptions in global aircraft supply chains and weakening Boeing’s access to a key aviation market. 

Airbus 

Airbus is also in the crosshairs of potential tariffs, particularly if the US proceeds with a 25% tariff on EU goods. However, it is better positioned to weather the storm. Airbus has established manufacturing facilities in Alabama, Mississippi, and Florida, which may help shield part of its operations from tariffs affecting imported aircraft. 

Still, Airbus is not immune. If new tariffs are imposed on EU-produced aircraft or components, costs could rise significantly. Dewulf warns that retaliatory measures from the EU could also make Boeing aircraft more expensive in Europe, further complicating trade relations. 

Airbus CEO Guillaume Faury has already hinted at adjusting delivery priorities, possibly focusing more on non-US customers to minimise tariff exposure. 

How Are Airlines Being Affected  

Ryanair 

Ryanair may delay the arrival of 25 Boeing aircraft expected in August 2025, according to CEO Michael O’Leary. The decision hinges on whether US tariffs significantly raise aircraft prices. “If tariffs are imposed on those aircraft, there’s every likelihood we may delay the delivery,” O’Leary shared with the news outlets. He added that the aircraft aren’t urgently needed until spring 2026. 

The move also reflects Ryanair’s strained relationship with Boeing over past manufacturing delays, making it easier for the airline to shift timelines without disrupting operations. 

Delta Air Lines 

Delta Air Lines is similarly unwilling to absorb the cost of tariffs. CEO Ed Bastian has indicated the airline will avoid paying higher prices caused by US tariffs on Airbus aircraft. With 10 wide-body jets on order, Delta could face additional costs of up to $150 million. “We will not be paying,” Bastian said, suggesting the airline might delay or restructure deliveries. 

Concerns Across the Industry  

The US aerospace sector has voiced broad concerns over the impact of trade tariffs. According to Dak Hardwick of the Aerospace Industries Association, “Decades-long trade agreements enabled robust civil aviation and defence trade, resulting in a strong export-driven industry. Tariffs on Canada and Mexico could change that trajectory.” 

The General Aviation Manufacturers Association, representing private jet makers, also warned that tariffs disrupt global supply chains that are highly regulated and not easily replaceable. 

Aerospace expert Jerrold Lundquist adds that “aircraft parts frequently pass international borders more than once,” making tariffs not only costly but administratively burdensome.