Donald Trump’s re-election has thrust the threat of tariffs into the spotlight, potentially shaking up the aviation sector. The growing trade war dynamic has implications for Boeing and Airbus, the top aircraft manufacturers globally.
Trump tariffs—like 25% on Canada and Mexico, 20% on China, and increases on aluminum and steel—could alter costs, competition, and market dynamics.
We take a deeper dive into just how these Trump tariffs might impact the aviation industry giants.
Boeing Braces for Trump Tariffs’ Impact
Boeing, a U.S.-based powerhouse and key exporter, depends on a worldwide supply chain. It sources landing gear from Canada and spends over $1 billion annually on Mexican parts.
With Trump tariffs at 25% on these imports, Boeing’s costs could climb. Aluminium, essential for planes like the 737, might see a slight uptick—under 0.3% per jet, per estimates.
However, tariffs on subassemblies or electronics, accounting for 20-30% of a plane’s price, could hit harder, pushing Boeing to hike prices and weaken its market stance.
Retaliation from Trump tariffs adds pressure. China, once 25% of Boeing’s deliveries, shifted to Airbus and COMAC during earlier trade clashes. Post-Trump tariffs in his first term, Beijing paused Boeing orders. With China’s aviation market surging, new Trump tariffs could deepen this exclusion.
Europe, set to claim 22% of global deliveries by 2043, might counter with its own levies. The EU’s hinted “trade bazooka” of quotas and tariffs could inflate Boeing’s prices abroad, piling onto challenges like safety issues and a 2024 strike costing $1 billion monthly.
Airbus Potential Gains?
Airbus, rooted in Europe, might sidestep some fallout from Trump tariffs. Its Mobile, Alabama, facility produces A320 and A220 jets for U.S. clients, dodging import duties.
This foothold could give Airbus a cost edge as Trump tariffs raise Boeing’s expenses. Globally, Airbus could thrive if Boeing falters.
In 2024, Airbus delivered 766 planes versus Boeing’s 348. Some experts predict Trump tariffs could boost Airbus’ market share to as much as 75-80%, especially if China favors the widebody A330 and A350 models.
Still, the tariffs pose risks for Airbus. Parts from Canada, Mexico, and China face levies, lifting costs at Mobile. A proposed 25% Trump tariff on EU goods could also raise prices for jets or parts from Toulouse or Hamburg.
CEO Guillaume Faury has signaled passing these costs to U.S. airlines like Delta. Yet, with 2,000+ U.S. suppliers across 40 states, Airbus’ adaptability appears to outshine Boeing’s under Trump tariffs.
The current aggressive trade war situation could potentially redefine the Boeing-Airbus rivalry. Boeing risks losing traction in China and Europe, where retaliatory measures might shrink its $135 billion market share.
Airbus, though not unscathed, could leverage its U.S. presence and global strategy to weather the current dynamic better. In an extreme case, Trump tariffs could cement Airbus’ dominance, leaving Boeing scrambling amid ongoing struggles.
Looking Ahead
The scope of the on-again, off-again trade tariffs remains fluid. Will exemptions ease the strain? Could China’s homegrown COMAC C919 seize an opening amid market uncertainty?
For now, Boeing faces seemingly steeper hurdles from proposed tariffs, while Airbus could climb higher. The stakes are sky-high, and industry watchers are looking on with interest.
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