US opens national security probe into imported commercial jets, engines
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The US Commerce Department investigation into imported commercial aircraft, jet engines and parts could form the basis of even higher tariffs on such items.
PHOTO: REUTERS
WASHINGTON – The US Commerce Department said on May 9 it has opened a national security investigation into the import of commercial aircraft, jet engines and parts.
The investigation, which was opened on May 1 but not publicly disclosed previously, could form the basis of even higher tariffs on imported planes, engines and parts.
Airlines and manufacturers have been lobbying the Trump administration to restore the tariff-free regime under the 1979 Civil Aircraft Agreement, under which the US sector enjoyed a US$75 billion (S$96.6 billion) annual trade surplus.
Most imported airplanes and components now face 10 per cent tariffs but a deal in principle struck with Britain on May 8 will allow British-made Rolls-Royce engines to enter the US duty-free, US Commerce Secretary Howard Lutnick said.
The US Commerce Department said on May 9 it is seeking public comment within three weeks on a series of comments on “the impact of foreign government subsidies and predatory trade practices on the competitiveness of the commercial aircraft and jet engine industry”.
Airline executives have raised the possibility of returning leased planes and deferring aircraft deliveries.
Delta Air Lines is also unwilling to pay tariffs on aircraft deliveries, saying the duties would upset its maths.
Planes assembled in the US are not immune, as aircraft makers must pay tariffs on imported parts.
Boeing is paying 10 per cent duty on supplies from Italy and Japan. United Airlines chief executive officer Scott Kirby in April said Airbus has had to pay tariffs on planes it is building in Alabama.
Aerospace industry officials say their situation differs from other industries, as their sector exports more than US$135 billion of products each year. Most of its manufacturing base and employees are also based in the US, they say.
GE Aerospace CEO Larry Culp told Reuters in April he recently met with US President Donald Trump and explained to him how the industry’s decades-old duty-free status helped it produce the highest trade balance of any sector.
The company said on May 9 it “will continue to work with the administration on efforts to preserve America’s global leadership in aerospace”.
In April, the US department opened a similar probe into the national security impact of imports of medium-duty and heavy-duty trucks and related parts. REUTERS
