Turbulence Ahead: How Current and Future Trade Measures Affect Aviation and Related Industries

Instability of global trade policy has triggered a surge in tariff negotiations across the globe, with far-reaching implications for multiple industries. While aviation and aerospace are largely considered to have avoided the most significant disruption, uncertainty remains with tariffs and negotiations continuing to impact derivative sectors.

The United States Supreme Court is expected to provide critical clarity regarding the President’s tariff authority this month, possibly by Friday, January 9, 2026, when the Court has indicated it will issue decisions on argued cases.

This Supreme Court ruling will have major implications for the global economy and decide questions around sweeping presidential powers, such as unilateral tariff authority and the ability to remove appointees of independent agencies.¹  

The Potential Faulty Premise Behind the U.S. Tariffs

The International Emergency Economic Powers Act (“IEEPA”)

Tariffs under IEEPA were introduced on the basis they were needed to address fentanyl trafficking and persistent trade imbalances. The tariffs’ effectiveness and relevance to the stated issues remain a topic of debate, and the IEEPA tariffs were challenged in court almost immediately.

On November 5, 2025, the Supreme Court heard oral arguments in the consolidated cases of Learning Resources v. Trump (24-1287) and Trump v. V.O.S. Selections (25-250), both challenging the President’s authority to impose tariffs under IEEPA. The case has drawn nationwide attention, with over 40 amicus briefs² filed. During oral arguments, at least three of the six “conservative” Justices appeared skeptical of the government’s arguments that IEEPA allows the imposition of open-ended tariffs of any rate at the President’s discretion. If that skepticism holds true in the Court’s decision, there would likely be a majority to find the tariffs exceeded the President’s authority under IEEPA.

All parties agreed that refunds of the tariffs would be unprecedented and “could be a mess,” as Justice Amy Coney Barrett noted. The Supreme Court updated its website on Tuesday, January 6 to reflect that it would be releasing decisions in previously argued cases on Friday, January 9, which will be the first decision day in the new year. It is widely speculated that a decision on the President’s authority to issue tariffs under IEEPA will be released on Friday or at the latest sometime this month. Further delay, under the Court’s normal timetable, would likely put at risk over $200 billion in collected tariffs, with no administrative mechanism in place to refund tariffs, or compensate those who paid inflated prices based on tariffs passed through to customers, suppliers, or distributors, total or partly.

It remains unclear what the Supreme Court’s relief would look like (e.g., a stay until the government can develop a process for refunds, or prospective relief). It is also unclear what congressional action may occur, as many of the arguments focus on delegation of traditional powers over tariffs and taxes. Also unclear is the impact striking down the IEEPA tariffs would have on the trade deals the Administration has reached, which have largely centered on agreeing to lower tariffs placed on foreign nations under IEEPA authority. The wide-reaching impacts of the tariffs in 2025, however, are clear—as of the U.S. Customs and Border Protection agency’s last update on December 14, 2025, the U.S. has collected more than $133.5 billion due to tariffs announced by President Trump since his inauguration in January 2025, with some present day estimates much higher.

Irrespective of the outcome, aviation and aerospace continue with zero-for-zero tariffs in most places, with steel and aluminum tariffs still around and under more secure authority, as discussed below. 

Section 232 Tariffs: Steel and Aluminum

A separate set of tariffs, enacted under Section 232 of the Trade Expansion Act of 1962, aim to safeguard U.S. national security and protect critical domestic industries from unfair trade practices and excessive foreign capacity. Tariffs on steel and aluminum were first announced during President Trump’s first term and are here to stay. Unlike the tariffs imposed under IEEPA, Section 232 tariffs specifically target imports of steel and aluminum, with recent adjustments intensifying their impact. Steel and aluminum are of course central to the aviation sector and its supply chain. 

Current Tariff Landscape for Aviation 

As of December 2025, the United States had increased tariffs on all aluminum and steel imports to amount to 50 percent, save for those from the United Kingdom, which remain subject to a 25 percent rate. This move has prompted foreign companies to consider establishing new aluminum and steel manufacturing facilities within the U.S. to circumvent these trade barriers.

Meanwhile, in positive news for aviation, the trade deals reached using the framework announced by the White House for “Potential Tariff Adjustments for Aligned Partners” include a return to zero-for-zero tariffs on civil aviation. So far, deals have been announced with the European Union, UK, Japan, Malaysia, South Korea and Switzerland. In return for a tariff deal, the nations usually must agree to significant investment in the United States and its industries, including the purchase of American-manufactured aircraft and the opening of new manufacturing plants in the U.S. 

In essence, the Administration has become a top advocate for U.S. civil aviation, with the United Kingdom, South Korea, Malaysia, and Thailand all agreeing to purchase Boeing aircraft and/or other American-made aerospace components, including G.E. or Pratt & Whitney engines. The deal with Japan also initially included the purchase of aircraft, but no specifics have been announced. How those purchasing commitments will play out, especially given the long lead times already present with U.S. Original Equipment Manufacturers (“OEMs”) and uncertainty in the supply chain, remains to be seen.

Other countries, however, are still attempting to negotiate a deal: 

• Singapore – This small but powerful city-state routinely punches above its weight in international aviation, with a great airline (Singapore Airlines), superb airport (Singapore Changi Airport), top aviation authority (Civil Aviation Authority of Singapore), and an outstanding aviation academy (Singapore Aviation Academy) that trains ATC and civil aviation authority managers throughout Southeast Asia. To date, it has not reached a new trade deal with the U.S. but faces only 10% tariffs—meaning it is better off than many other nations.
• Canada – The Administration has also not reached a new trade deal with its northern neighbor and currently imposes a 25% tariff on goods not under the United States-Mexico-Canada Agreement (“USMCA”). However, aircraft and engines are exempt from the 25% U.S. National Emergency Tariff if they qualify under USMCA (manufactured or substantially transformed in Canada).
• Brazil – The Administration has also not reached a deal with Brazil, but the currently imposed tariffs contain an exemption for the aerospace sector, including Embraer and Helibras, which face a 10% tariff.
• Mexico – No trade deal is imminent with the United States’ southern neighbor, but the pause on tariffs increasing to 30% overall has been extended again—tariffs remain at 25% on fentanyl precursors, 25% on car parts, and 50% on steel, aluminum, copper. As with Canada, products that qualify under USMCA (manufactured or substantially transformed in Mexico) are exempt. Refinishing products in Mexico to obtain favorable status under USMCA, however, is becoming more difficult, with Mexico recently announcing 50% tariffs on goods such as aluminum and other metals imported from Asian nations including China, Thailand, India, and Indonesia.  
• Taiwan – Taiwanese imports are currently subject to a 20% tariff in the United States. Taiwan is reportedly seeking a 15% tariff deal, although the exact details and how negotiations between the two nations will unfold remain unknown. Taiwan is a large producer of semiconductors and therefore holds significant negotiating power, while the U.S. has its own leverage with increased military sales.
• China – The parties are currently operating under a one-year deal to keep tariffs on imports from China into the U.S. at 49%. As part of the broader package, the two countries have reached a deal on the sale of TikTok, on trade with semiconductors and soybeans, as well as suspending China’s rare earth mineral export controls and the U.S. Affiliates Rule, which would have limited the ability of entities more than 50% foreign-owned to purchase certain U.S. technology.
• India – After months of tension and uncertainty, the parties are negotiating, and the U.S. has exempted some agricultural exports. However, products from India still face 50% tariffs, including a 25% tariff imposed due to India purchasing Russian oil.

The Uneven Impacts of Tariffs on Industry 

Despite the heightened tariffs, aerospace OEMs and airlines have thus far demonstrated resilience, maintaining strong performance in a challenging environment. This sharply contrasts with the difficulties faced by sectors such as furniture, textiles, and chips, which have been more severely impacted by the new trade measures. 

To take just one example, in response to tariffs on steel and aluminum, the EU imposed 50% tariffs on U.S. whiskey. The administration responded with a threat of 200% tariffs on all European alcohol.   

This was later changed to a proposed 20% tariff on EU wine, 30% on South African wine, and 17% on Israeli wine. At the time of writing, a 10% tariff remains in effect on all European imports, including alcohol. European wine and whisky sales are down by 6-7%. U.S. distributors scrambled to stockpile bottles, while European makers find themselves cutting back, with inventories burgeoning. Their wine sales alone amount to over $4.8B to the U.S.—their largest market. 

The Threat of Tariffs in Aviation and Aerospace

While the aerospace industry has managed to avoid this type of disruption, the specter of further trade restrictions and ongoing market volatility pose a threat.

Some shifts are already happening—pre-owned aircraft have become more attractive by avoiding higher costs associated with manufacturing new aircraft. However, the costs of maintenance, repair and overhaul (MRO) visits are also impacted by the current tariff environment. Manufacturers may shift production and maintenance to lower tariffed and more local nations and establish new trade relationships.

Aircraft demand has changed, with leasing, chartering and fractional ownership up as a more economical alternative to buying new. Some tariffs are applicable to preowned engines or aircraft, depending on origin.

Supply chain concerns persist, especially as aviation’s globally sourced parts increase costs from tariffs, leaving OEMs with two choices—absorb or pass on to customers. Multinational supply chains face challenges in turbulent times. Industry players are watching developments closely, most notably the Supreme Court’s decision on IEEPA, and are aware that future policy shifts could quickly alter the landscape and affect their operations.

Other Tariff Authorities Available to the Administration 

While U.S. Treasury Secretary Scott Bessent recently expressed confidence that the Supreme Court would rule in favor of the Administration, Secretary Bessent also noted that in the event of a loss “we can re-create the exact tariff structure . . . ” If the Supreme Court strikes down the IEEPA tariffs, the Administration possesses other, more well-established legal authorities to impose tariffs, although most are less far-reaching and require regulatory processes prior to implementation:

• Section 301 of the Trade Act of 1974 (unfair trade practices);
• Section 232 of the Trade Expansion Act of 1963 (national security);
• Section 122 Trade Act of 1974 (balance of payment deficit);
• Section 338 of the Tariff Act of 1930 (unreasonable or discriminatory actions affecting U.S. commerce); and 
• Countervailing and Anti-Dumping Tariffs authorized by Title VII of the Tariff Act of 1930 (specific goods sold at unfairly low prices or subsidized by foreign governments). 

Indeed, the Administration has announced an investigation under Section 232 into whether imported commercial aircraft and their parts threaten U.S. national security. The Administration is currently reviewing submitted comments, but if tariffs lie, that would be a shift away from the 1979 Agreement on Trade in Civil Aircraft, and contradict the trade deals the President has been reaching with various nations.

Preparing for the Future

While the world awaits the Supreme Court’s ruling as soon as Friday, January 9, aviation stakeholders and importers generally are preparing for what could come next. 

As noted above, importers are unlikely to receive immediate refunds if the Supreme Court rules against the Administration’s IEEPA tariffs. Currently, two methods are available to obtain refunds: 

1) corrections for import entries where the final tally of money owed to U.S. Customs and Border Protection (CBP) has not yet been determined (“unliquidated,” e.g., those entered within the past 314-day CBP liquidation cycle); or 

2) administrative protests for liquidated import entries past the correction period. 

While some companies have filed appeals with CBP, several others have recently filed federal lawsuits to ensure their rights to refunds are not jeopardized while the Supreme Court deliberates, including Costco, Revlon, Kawasaki, and Bumble Bee Foods.

With the uncertainty around the IEEPA case, the complexities of recent or future tariffs, and the challenges of any refund process, it is more important than ever for OEMs and other manufacturers to consider whether their products can be manufactured and imported in a form that allows the most favorable classification under the Harmonized Tariff Schedule of the United States (HTSUS). 

However, the U.S. Department of Justice may seek administrative action and file federal lawsuits seeking to challenge a company’s tariff classification if it is believed to be improper. If the government succeeds, the company could face retroactive duty payments. See Honeywell International, Inc. v. United States, Court No. 17-00256 (Honeywell-imported aircraft brake disc precursors will now face a 7% ad valorem duty rate).  

While big-picture tariff shifts and trade deals are dominating the headlines, routine enforcement of the HTSUS and U.S. import laws remains active and should continue to be an area of focus for importers.

Conclusion

The imposition of new tariffs in 2025 had varied consequences across different sectors, especially when coupled with pre-existing tariff and import duties and enforcement. Aviation and aerospace remain relatively unscathed by the newly announced tariff rates, yet the ongoing uncertainty in 2026 means vigilance is crucial. Other industries, meanwhile, face greater challenges, underscoring the uneven impact of these measures and the need for a nuanced approach to trade policy.

Looking ahead, businesses should prepare for rapid shifts in trade policy and consider proactive strategies to mitigate risk, particularly with respect to the upcoming Supreme Court decision. Contracts shifting risk from tariffs pre- and post-delivery of aircraft and engines, either as “taxes, fees, or user charges,” or even force majeure, are receiving particular attention.

Aviation may have avoided the worst effects for now, but the sector could see higher costs, supply chain challenges, and shifts in buyer behavior. For further details or specific advice please contact our team

¹See Trump v. Slaughter (Docket No. 25-332), argued December 8, 2025. 

²In the U.S., amicus briefs are filed by persons or organizations that are not parties to a proceeding but possess a strong interest in the outcome of the case, which must contain additional, relevant information for the court’s consideration.