Oil threat and industry alert
For months, companies on both sides of the Atlantic were on alert. The focus was on the possible introduction of hefty US import tariffs of up to % should negotiations with the EU fail. In aviation - a highly globally networked and cost-intensive industry - additional levies would have had dramatic consequences: extreme price increases for aircraft purchases, disrupted supply chains for spare parts and components and, in the worst-case scenario, financial hardship for many suppliers, including the threat of their fleets being decommissioned.
The surprising twist: Duty-free for aviation
The current development brings relief: as part of the new transatlantic trade agreement between the US government and the EU, a general import tariff of 15 % was agreed for many European products. However, what remains decisive and crucial is that the aviation industry - aircraft, parts and components - has been expressly and mutually exempted from these tariffs. The industry therefore remains duty-free, which represents an essential buffer against market-distorting costs.
According to observers, this exception is a response to the fact that a customs regime in this sensitive sector would ultimately also have caused massive damage to US industry. Companies such as Airbus and Boeing, as well as suppliers such as GE Aerospace and Safran, operate in a highly interconnected supply system - such an exemption is critical to maintaining this stability.
Lobbying, industry cooperation and political significance
This agreement is the result of intensive lobbying, including by competitors. Industry representatives and executives - including the CEO of GE Aerospace - lobbied political decision-makers in favour of a duty-free arrangement and argued that old agreements such as the 1979 agreement on the duty-free supply of aircraft should continue to apply. The agreement can therefore also be seen as a remarkable sign of cross-sector co-operation despite geopolitical tensions.
Impact on manufacturers outside Europe
Although European manufacturers can breathe a sigh of relief, other manufacturers have not been left unscathed. Brazilian aircraft manufacturer Embraer has been less favourably affected by the agreement: with immediate effect, it will be subject to import duties of 15 %, making its competitive position in the USA even more difficult. The Swiss manufacturer Pilatus has also been hit particularly hard: following the introduction of tariffs of up to 39 %, it is temporarily withdrawing from the US market. This shows that although the new rule protects the European sector, it puts other global players under pressure.
A look into the future of the aviation markets
Thanks to the duty-free agreement, the basis for international aircraft deliveries, maintenance work and spare parts remains stable - a key requirement for functioning fleet operators, airlines and private owners. The agreement provides planning security for production volumes, procurement trips and investments in the spare parts trade. At the same time, it remains to be seen how further developments in other sectors - such as the automotive, wine and technology industries - will affect the overall economic framework and possible spillover effects on aviation.
Conclusion
In the midst of global trade conflicts, the aviation industry provides a successful example of targeted exemptions to protect strategic interests. The duty-free regulation averted existential risks. The balancing of political interests, industry protection and economic dynamics is likely to remain central to further negotiations - as an example of how complex industries can be given special consideration in trade agreements.
Source references:
AOPA