The industry consensus* on aircraft transactions:

• The US has says that it will introduce 25% tariffs on many Mexican and Canadian products on 2nd April 2025
• This looks set to include both new and pre-owned aircraft built in Canada.
• Until 2nd April, 2025 Canadian aircraft and engines are covered by the US-Mexico-Canada Agreement (USMCA) provided that you have certification from the manufacturer or the seller showing that it was manufactured in Canada.
• Aircraft registration is not key – so a US buyer of a Canadian (or Mexican) registered aircraft would not pay tariffs when importing it into the country.
• Things are changing fast.

New US tariffs could also have a big impact on business jet manufacturers.

• On 12th March, the US introduced 25% tariffs on aluminium and steel – which are key materials for aircraft production.
• It is not clear how components are covered under USMCA. This is important as Canada and Mexican companies are key providers of engines (especially Pratt & Whitney Canada), avionics, and parts and components.
• The state of Quebec alone exported product and parts worth $8.7bn to the US in 2023.
• The Mexican Aerospace Industry Federation says that its members exported $9.4bn of aviation products and services to the US in 2023 (it also imported $4.8bn). 
• There are more than 290 aerospace manufacturers in the country. Bombardier, Gulfstream and Textron have facilities in Mexico. Other key suppliers  include Collins, GE, GKN Fokker and Safran, which are key suppliers to aircraft builders. 

*please email aw@corporatejetinvestor.com if you disagree.
 

Expert opinons

That What the Heck of US Tariffs on Canadian Aircraft – Paul Jebely

Town Hall

Corporate Jet Investor hosted an emergency Town Hall on Friday 7th March with Jonathan Epstein, partner, Holland & Knight; Ehsan Monfared, partner, YYZlaw and Tobias Kleitman, TVPX. You can read a summary here or watch it here:

Trump thy neighbour – December 2, 2024 – an opinion piece discussing rumoured tariffs