March 12, 2025
New tariffs and trade measures may carry unintended consequences for business aviation, but the rapidly changing landscape regarding levies is, for now, generating more questions than answers. That was the consensus agreement among an expert panel convened to discuss tariffs for the latest NBAA News Hour webinar: “The Tariff Landscape — What we Know Now.”
The primary concern for business aviation is the recently announced tariffs on aluminum and steel imports from Canada and Mexico.
“In this administration’s first term, the steel and aluminum industries were viewed as critical to national security, and tariffs were put in place to protect and help build these industries,” said Bruce Hirst, of counsel at Washington, D.C.-based Capital Counsel. “These tariffs were then subject to exemptions and eventually revoked during the Biden administration. The novelty this time is there will be a straight tariff on these metals, and the tariff will be extended to a number of derivative products that contain these metals.”
The impact of these new policies could have a wide-reaching effect on business aviation, from duties placed on new aircraft being imported into the U.S., to aircraft that have been substantively modified outside the U.S.
“If you have a U.S. manufactured aircraft that was Mexican registry but was being sold in the United States, that’s presumably American goods returned, and shouldn’t trigger the tariff, but we don’t really have guidance on aircraft that have been improved with new avionics or a new interior that has improved their value advanced value,” said Jonathan Epstein, partner at the law firm Holland & Knight.” Would that then be subject to the tariff, or would they fall under existing exemptions in the United States-Mexico-Canada Agreement (USMCA) trade agreement?”
The USMCA, which went into effect on July 1, 2020, replaced the North American Free Trade Agreement that had governed trade between the three countries since 1994.
The lack of clarity on how tariffs may impact business aviation is already impacting aircraft transactions, noted Katie DeLuca, partner at Miami-based law firm Harper Meyer, with some buyers seeking to expedite inspections, and some sellers trying to terminate contract negotiations to avoid a potentially costly tariff charge. The long-term impact could even disrupt the global market for aircraft, DeLuca added.
“There are many concerns here, and sellers looking to the U.S. will certainly have to consider if they should import their aircraft to the U.S. now,” she added. “It’s too early to say definitively, but I know there is concern outside the U.S. that the U.S. market might eventually become unavailable, especially if there are retaliatory tariffs. We could get to the point where there’s a regionalization with a European market, a South American market, a U.S. market, and so on,” DeLuca continued, noting that foreign operators who would routinely maintain their aircraft in the U.S. may also seek new markets.
Tariffs could also drastically alter business aviation’s supply chain, said Peter Greenberg, international affairs director for the International Association of Machinists and Aerospace Workers.
“The supply chains in North America have become so integrated in aerospace that it would be very difficult for manufacturers to move to solely U.S.-based suppliers, or solely Canadian suppliers,” he said. “There is also a deep well of aerospace skills, particularly in the U.S. and Canada, that allow companies to take advantage of economies of scale. The complexity of this supply chain is really hard to overstate.”
Safety could also come under the spotlight, Greenberg added. “The supply chain and the established certification procedures that result in a safe aviation operating environment can’t just be replicated,” he said. “Replacing existing pieces of the supply chain from scratch would be time-consuming and expensive and probably also have a negative safety impact.”
This new environment calls for an industrywide advocacy effort, said webinar moderator and NBAA Senior Vice President, Government Affairs, Kristie Greco Johnson.
“The tariff landscape is incredibly fluid; dynamics are changing by the day and even by the hour; it’s incredibly unpredictable, and there are many unanswered questions as we wait for further guidance from the government agencies responsible for these policies and from the White House,” she said. “As we navigate this landscape, NBAA will work tirelessly to keep the industry informed.”
International Business Aviation Council Ltd.