If I were to survey aerospace and defense (A&D) industry leaders about what they are most hoping for in 2025, I’m confident that they would not request double-digit tariffs on trade between the U.S. and its main trading partners. And yet, that seems to be what they must now be bracing for, with President-elect Donald Trump having confirmed on November 25 that among the stack of executive orders he intends to sign after his inauguration on January 20 are tariffs of at least 25% on Canada and Mexico and at least 10% on China.

These rates could be imposed over and above the baseline tariffs of between 10 and 20%, which Trump has previously threatened to impose on all other major A&D trading partners, including France, Germany, the UK, and Singapore. In the case of China, the 10% rate could be applied on top of a blanket 60% tariff promised during the election campaign.

According to Trump’s America First narrative, the tariffs are intended to serve several purposes that go beyond correcting any real or perceived trade imbalances. These include boosting manufacturing and jobs in the U.S., raising funds to underwrite the fiscal leeway needed for promised tax cuts, and applying pressure on other countries to clamp down on illegal immigration and drug trafficking.

Focusing purely on the first objective in the context of the A&D sector, it is hard to see how tariffs will achieve the desired outcome. Quite apart from balance of trade considerations (more on those below), realistically, how can aircraft manufactured in the U.S. be disentangled from the major systems and parts sourced from long-established international partners? Since airframers are hardly likely to eat the additional costs, the impact of tariffs surely will be passed along to customers and their customers, too.

If It Ain't Broke, Why Are We Trying To Fix It?

Will we ever see an all-American airplane again—or an all-European airplane, for that matter? While the respective European and American aerospace giants Airbus and Boeing have repeatedly butted heads over issues such as allegedly unfair subsidies, the fact remains that the two continents’ A&D sectors are inextricably connected through trading bonds that are, for the most part, underpinned by mutual self-interest.

Fundamentally, what concerns U.S. A&D leaders bracing for the impact of tariffs is that the current framework—a tariff-free environment based on the GATT trade agreement since the 1980s—has served American interests very well indeed. In simple terms, those who discussed the topic with AIN on background concluded, “It ain't broke, it doesn't need fixing. And if you mess with it now, you could invite very unattractive unforeseen consequences.”

If U.S. airframers were suddenly to be induced to replace “foreign” hardware with homemade alternatives, that would surely mean complex and costly certification issues. It would also reduce competition in terms of available suppliers, pushing up costs for an already highly stressed A&D supply chain.

Then there are the almost inevitable retaliatory tariffs on U.S. A&D exports around the world. According to the U.S. Aerospace Industries Association (AIA), the latest full-year figures for 2023 showed American companies achieving a 21% increase in exports to $135.9 billion. The top destinations for U.S.-made A&D products were Canada, Germany, France, the UK, and Singapore—all of which are now facing tariffs on their goods.

U.S. Industry Is Already Winning

In 2023, the U.S. aerospace industry registered a trade surplus of nearly $114 billion. So if a trade war ensues, American companies would appear to have more to lose in terms of dwindling exports. When it comes to defense products, tariffs are expected to inflate the U.S. national security tab, passing yet more expense onto the shoulders of U.S. taxpayers.

What remains to be seen is whether U.S. aerospace OEMs might be induced into relocating production currently housed in other countries, e.g. across the border in Mexico, back “home.” Also hard to predict is whether any foreign OEMs might feel the need to invest in establishing more production capacity within the U.S.—even at the cost of their domestic industrial base—to avoid tariffs. In both cases, these moves would presuppose that sufficient skill bases would be available in the U.S., where the industry is already facing stiff workforce competition with other high-tech sectors.

Sources close to the discussions around the pending tariffs have raised concerns about mind-numbing bureaucracy that could be involved in collecting payments. Aircraft and their various subsystems commonly cross borders between suppliers multiple times before they are delivered to an end customer and routinely include parts sourced from multiple countries. Who is going to figure out what tariffs are due and on what basis?

Groups such as the AIA are likely hoping the Trump Administration takes a more selective approach to tariffs to differentiate between industries and their trading patterns. But for now, industry lobbyists are largely remaining tactful in airing their concerns until they can more directly engage with the new leadership in Washington, D.C.

“The aerospace and defense industry is an engine for America’s economic growth and critical to supporting U.S. national security,” said AIA v-p for international affairs Dak Hardwick. “Our sector has the highest positive balance of any U.S. economic sector, making it the ideal trading sector to drive job growth in the U.S.

“Our industry is—and will remain—global, sourcing critical parts, components, and materials that allow us to build our products here at home and export them to partners. We look forward to working with the incoming Trump Administration to provide insight into how to tailor tariffs to maximize U.S. job creating and support American aerospace and defense.”

Highest Tariffs since the Great Depression

At face value, the 2025 tariffs are set to be the highest since those imposed by President Herbert Hoover in 1930, which resulted in a 67% reduction in U.S. imports and exports, and are widely viewed as having been a key driver of the Great Depression. Aircraft manufacturing was in its infancy then, with little or no international collaboration. But where could Trump’s supposedly “America First” tariffs leave American aerospace leaders such as Textron, Honeywell, GE, Goodrich, Lockheed Martin, and Pratt & Whitney, with manufacturing infrastructure in Mexico and Canada linked by umbilical cords to their U.S. plants?

Where would Gulfstream business jets and Bombardier Globals be without their German-made Rolls-Royce BR700 and Pearl engines? What about the impact of an aircraft such as Dassault’s Falcon 6X, which starts life in France with Canadian-made Pratt & Whitney Canada PW800 engines and U.S.-assembled Honeywell Primus Epic avionics, before being flown across the pond to have its cabin interior expertly installed in Little Rock, Arkansas? The bureaucracy around tariffs is mind-bending in and of itself.

Newly elected administrations have every right to push their policy agendas to fulfill their political objectives and mandates, and no one can say that President-elect Trump didn’t vividly describe the tariffs on the campaign trail. But those now trying to find the right words of caution in pushing for a more measured approach might want to mine this time-worn proverb: “The road to hell is paved with good intentions.” Happy New Year.

The opinions expressed in this column are those of the author and not necessarily endorsed by AIN Media Group.