Boeing says President Trump wants to protect and nurture him.
However, his tariffs could have the opposite effect on the company's suppliers.
Trump has imposed several tariffs so far, but he says more will come in just a few weeks. The threat has surprised Boeing, one of the biggest companies, the aerospace industry. The duties of two of the most important raw materials used in aircraft, aluminum and steel, are expected to increase manufacturing costs. However, the industry is far more concerned with tariffs that will be in effect on goods from Canada and Mexico next month, which could disrupt the highly integrated North American supply chain.
“These tariffs are particularly challenging for industries like aerospace, which have been tax-free for decades,” said Bruce Hirsch, a trade policy expert at Capitol Counsel, a Washington lobbying company with aerospace clients. “The parts come from everywhere.”
Aerospace experts say the industry is an example of US manufacturing capabilities. It offers high paying jobs and has produced one of the biggest trade surpluses in any industry for years. Aerospace is expected to export approximately $125 billion this year, according to Ibisworld.
But the industry is operating under a cloud of uncertainty. Many companies have managed to avoid costly cross-border tariffs under a short-term reprieve on products covered by the North American trade agreement Trump negotiated in his first term. However, the transaction expires in April.
In a letter to management staff last week, a group representing airlines, plane repair stations, suppliers and manufacturers sought tariff exceptions and argued that the industry needs to remain competitive in the global market.
For Boeing, tariffs will come at a difficult moment. The company has recovered from the crisis that began over the past year when the panel was blown away from the Boeing 737 Max Jet during a flight in January 2024. Although there were no casualties, the incident exposed the shortcomings and prompted intense scrutiny from regulators. The company replaced its CEO and began overhauling its business.
After months of upset, including almost two months of strikes, Boeing steadily increased production of the Max, its bestseller jets and other planes. However, tariffs can hurt the companies that supply it and other aerospace manufacturers. Aluminum accounts for about three-quarters of its largest content. Steel is much smaller but still holds a significant share.
Brian West, the company's chief financial officer, said at an investor meeting Wednesday that the direct impact of tariffs on Boeing was limited. The company has a lot of stock and its spending is already overwhelmingly concentrated in the US. Furthermore, he said that rising metal prices will increase the cost of making planes to less than 1%.
But tariffs could hit businesses further down the aerospace supply chain, which has struggled for years with material shortages and labor shortages.
“What we're worried about is the availability of parts because this is a broad, complex supply chain and the level of people exposing them to different levels,” West said.
Tariffs could increase the costs of the aerospace industry by about $5 billion a year, according to Kevin Michaels, managing director of consulting firm Aerodynamic Advisory. Most of this will come from tariffs on goods from Canada and Mexico. And the threat of a trade war only exacerbates the outcome.
“Not only does it increase the tariffs of the country, it can also retaliate against the nations,” Michaels said. “And boy, Canada is mad.”
Last month, Eric Martell, president and CEO of Bombardier, a leading manufacturer of Montreal-based corporate jets, said the company has suspended its financial forecast for the year as the company could have a major impact on the industry due to the possibility of tariffs and retaliation. Some of Boeing's 787 and 777 jets are built in Canada and are home to CAE, the leading manufacturer of flight simulators. Pratt & Whitney manufactures engines for Quebec helicopters and other aircraft.
Mexico has many suppliers, both large and small. Produces components for Collins Aerospace, Honeywell Aerospace, Ge Aerospace or commercial and business jets.
If tariffs are imposed, analysts said it would be difficult, if not impossible, to move its production to the United States.
“If that really happened, it would take a very long time,” said industry consultant Jerold Lundkist. “There's a fundamental economics as to why that supply chain is distributed in the first place. Usually it's labor costs, but there are also the availability of materials.”
The industry operates with a long-standing perspective – planes take years to design, months to decades and are usually used for decades – so the decision to move operations is not made lightly. With the lack of sufficiently skilled aerospace workers in the United States, suppliers have struggled for years to hire sufficient workers.
In a November report to Congress, the coalition representing industry, workers and safety experts concluded that “aerospace supply chains are vulnerable to labor shortages, critical material obstacles, and the health of support infrastructure.”
Industry experts said even the threat of escalation in trade tensions is hurting aerospace manufacturers.
“Many strategic decisions are frozen as a result of this,” Michaels said.
