President Trump’s tariffs are sending international shock waves, and there are major implications for the aerospace and aviation industry.
With proposed duties like 25% on imports from Canada and Mexico, 20% on China, and extra levies on aluminium and steel, Airbus and Boeing face big changes.
These two manufacturing giants dominate commercial aviation, but their fates differ under Trump’s trade policy. Let’s break it down.
Boeing Faces a Rough Ride
Boeing, the American aerospace titan, is in something of a tough spot. It relies heavily on a global supply chain for key parts.
For example, landing gear assemblies come from Canada, and Mexico supplies over $1 billion in components yearly. A 25% tariff on these imports could spike costs. Experts estimate a Boeing 787’s price might jump by $40 million in a worst-case scenario.
Aluminium and steel tariffs add more pressure. At first glance, they only increase a plane’s cost by less than 0.3. That works out as under $200,000 for a 737, but it still hurts when you build hundreds of aircraft.
Boeing’s margins are already thin after safety scandals, a 2024 strike costing $1 billion monthly, and delayed deliveries.
Then there is possible retaliation. China, once 25% of Boeing’s market, might buy more Airbus or COMAC jets instead.
Europe, set to take 22% of global deliveries by 2043, could hit back with its own tariffs or quotas. This “trade bazooka” could make Boeing planes pricier abroad, shrinking its $135 billion market share.
Unlike Airbus, Boeing can’t easily pass on costs or shift production overseas. It’s a recipe for losing ground.
Airbus Gains an Edge
Airbus, based in Europe, is better equipped to handle this storm. Its Mobile, Alabama assembly line builds A320 and A220 jets for U.S. customers. This avoids import tariffs on finished planes.
With over 2,000 U.S. suppliers and $15 billion in annual spending across 40 states, Airbus has deep American roots.
Still, it’s not all smooth flying for Airbus. Parts from Canada, Mexico, and China face duties, raising costs at the Mobile plant.
A potential 25% tariff on EU goods could also sting, hitting jets or parts from Toulouse or Hamburg. CEO Guillaume Faury says Airbus might pass these costs to U.S. airlines like Delta.
Globally, Airbus could thrive. If Boeing stumbles, Airbus might grab more of China’s market with widebody A330s and A350s.
In 2024, Airbus delivered 766 planes to Boeing’s 348. Some predict its market share could hit 75-80% if tariffs drag on. Flexibility is one of Airbus’ strengths.
Airbus CEO Signals a Shift
Airbus CEO Guillaume Faury has dropped a hint recently about the company’s strategy. He’s suggested that if trade disruptions worsen, Airbus may favor deliveries to non-U.S. customers.
This move would prioritize markets like China and Europe over American airlines. With its global production network, Airbus can redirect planes built in Toulouse or Hamburg to buyers outside the U.S.
This flexibility could shield profits if U.S. demand softens under tariff pressures. It’s a clear sign Airbus is ready to adapt, and possibly leave Boeing in the dust.
Looking Ahead
Tariffs on aluminium, steel, and components raise costs for both companies. But Boeing’s dependence on imports and exports makes it more exposed.
Airbus’ U.S. presence and adaptability give it a clear advantage. Airlines could feel the pinch too. Higher plane prices could see up to $40 million added on the cost of one aircraft. This might mean pricier tickets or tighter margins for budget carriers.
The aviation supply chain is complex. These tariffs send shockwaves beyond Airbus and Boeing. How long they last and how other countries respond will shape the outcome. For now, there is still uncertainty.
Trump’s tariffs are a double-edged sword. Boeing risks losing its competitive edge, while Airbus could strengthen its grip on the market and soar ahead.
All eyes will be on signs and developments from the two giants as the full weight of Trump tariffs takes hold.
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