Automotive, consumer goods and industrial equipment have been delayed in ports and have been in trouble over the past few months due to the White House’s inappropriate tariff policies.
Sources told Reuters that aircraft and their engines are usually ordered by U.S. buyers a few years in advance, and that tariff chaos could delay transport of both, even if the industry is not directly targeting duties. Frequent changes and increased costs emphasize shortages of supply chains, parts and labor.
Outside Montreal, workers at Airbus Canada’s factory have gathered a single-time A220 jet in the past few months, even if the aircraft will be shipped to its intended customer, Delta Air Lines, as the tariff policy for car change is unclear whether the aircraft will be on or without 25% responsibility.
The rapidly changing landscape means the Delta may get 130 seats of aircraft without tariffs or can owe the U.S. government to make parts outside the U.S. The aircraft is expected to be delivered in June, according to data from aviation analytics company Cirium.
Delta and Airbus declined to comment on whether the A220 jet would be taxed.
For aerospace, tariffs are rarely a problem. In addition to the 18-month transatlantic tariff war against Airbus and Boeing subsidies in 2020 and 2021, the industry also guaranteed zero-car deals, including the United States and Canada, but not Mexico, under the 1979 treaty.
But President Donald Trump has frequent tariff changes during this A220 Jet rally, which illustrates how his strategy increases risk to planners and airlines.
In early February, when Airbus employees in Mirabell, Quebec worked inside the plane at the beginning of the convention, Trump said Trump threatened a 25% tariff on goods imported from Canada and Mexico, a source said. According to 2024 Cirium delivery data, the tax will significantly increase the cost of the delta on aircraft worth about $40.5 million.
Transfer tariff policy
Before that tariffs came into effect, Trump postponed it for 30 days before saying goods that meet the Trump negotiations in the United States-Mexico-Canada agreement will be tax-free. These requirements forced Canadian Aerospace to scramble to sort out paperwork they previously didn’t need.
Industry sources said the special plane, recently painted in the color of the delta, is believed to comply with the 2020 agreement and is therefore exempt from tariffs. Canadian bombers said their jets were compliant and they had no responsibility to deliver them to U.S. customers, a source told Reuters.
But the chaos is so great that at a recent factory meeting, Airbus told workers that tariffs were complex and evolving.
Tariffs may also lead to negotiations between manufacturers and airlines on whom they pay. Delta said on Wednesday it would delay delivery rather than pay tariffs in the face of slowing travel demand.
“One thing you need to know that we are very clear is that we are not paying tariffs on any aircraft delivery,” Delta CEO Ed Bastian told analysts. “We are very clear about Airbus and we will work hard to see what happens.”
“Unprecedented uncertainty”
By the end of 2024, Delta Air Lines estimates it will acquire 43 aircraft from Airbus. These jets are expected to come from production lines outside the United States
Airbus CEO Guillaume Faury warned in February that the company could give delivery priority to non-U.S. customers if tariffs were to undermine imports.
After Trump announced a 90-day pause on many tariffs on Wednesday, Treasury Secretary Scott Bessent said Canada would face 10% tariffs along with other countries, and then White House officials clarified that nothing had changed.
U.S. President Donald Trump abruptly suspended his reciprocal tariffs on many countries around the world, which lasted for 90 days. The White House initially said Canada would still face another 10% benchmark tariff, but later reversed that position. Global stock markets soared after investors heard about probation. Finally, there are currently no new changes in tariffs on Canadian goods.
Tariff confusion shocked the entire industry. Some shipments of some RTX engines from one of its Canadian units to U.S. customers were temporarily delayed as the company sours paperwork to demonstrate compliance with the Cusma. RTX declined to comment.
Bastian said on Wednesday that Trump’s policy has led to “unprecedented uncertainty” that has also dragged down travel demand, warning the economy will lose steam until the uncertainty arises from tariffs is resolved.
“I want our leaders in Washington to pay attention,” he said.
