Singapore, July 16 - The global aviation industry is grappling with significant uncertainty due to potential U.S. tariffs on imported aircraft and components, which could disrupt aircraft deliveries and increase costs across the sector, according to Willie Walsh, Director-General of the International Air Transport Association (IATA). Speaking at a media roundtable in Singapore on July 16, 2025, Walsh highlighted that the threat of tariffs, particularly a proposed 50% levy on Brazilian exports set to begin in August, is causing airlines to reconsider accepting new aircraft deliveries. This uncertainty stems from the potential for tariffs to significantly raise the cost of aircraft, affecting not only major manufacturers like Boeing and Airbus but also smaller players like Embraer and the broader aerospace supply chain. The impact could ripple through the industry, influencing operational costs, fleet planning, and ultimately, airfares for consumers.
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The proposed U.S. tariffs, part of President Donald Trump’s trade policy, are intended to address trade imbalances and bolster domestic manufacturing. However, they pose a significant challenge for the aviation sector, which relies heavily on global supply chains. For instance, Embraer’s CEO, Francisco Gomes Neto, warned that the 50% tariff on Brazilian exports could severely impact the company’s revenue, likening its potential effect to the financial strain experienced during the COVID-19 pandemic. Embraer, a key supplier of regional jets to U.S. airlines, faces risks of order cancellations or deferred deliveries as airlines balk at absorbing the additional costs. This could also affect U.S. suppliers, as many components in Embraer’s aircraft are sourced from American companies, creating a complex web of economic consequences. The uncertainty surrounding tariffs extends beyond Brazil. The U.S. aviation industry has already faced challenges from earlier tariff proposals, including a 10% levy on European-made Airbus aircraft in 2019 and threats of tariffs on Canadian and Mexican goods.
These policies have disrupted long-standing trade agreements, such as the 1979 Civil Aircraft Agreement, which facilitated duty-free trade in civil aviation. The reintroduction of tariffs has led airlines like Delta Air Lines to take a firm stance, with CEO Ed Bastian stating that the carrier will defer deliveries rather than pay additional duties. Delta, a major Airbus customer, expects to receive 43 aircraft in 2025, many of which could face tariffs if sourced from outside the U.S. The broader implications for the aviation industry are substantial. Higher aircraft costs could lead to increased ticket prices, as airlines may pass on the additional expenses to consumers. Additionally, supply chain disruptions and delivery delays could exacerbate existing challenges, such as the global aircraft shortage, with IATA estimating a backlog of 17,000 planes, equivalent to 14 years of production at current rates.
Engine shortages, particularly with Pratt & Whitney, have already grounded thousands of aircraft, and tariffs could further complicate maintenance and production schedules. While some manufacturers, like Airbus, benefit from U.S.-based facilities that may mitigate tariff impacts, others, including Boeing, face challenges in markets like China, where retaliatory measures could limit access to a critical growth market. Despite these challenges, Walsh remains cautiously optimistic, noting that airlines are more adept at navigating uncertainty than they were two decades ago, thanks to lessons learned during the pandemic. Lower jet fuel prices offer some relief, but the industry must brace for potential demand fluctuations and higher operational costs. As airlines and manufacturers await clarity on tariff policies, the aviation sector faces a delicate balancing act to maintain growth and affordability in an increasingly volatile trade environment.