The Great Tariff Wall and Aerospace
Trade friction between the US and China isn't new, but what's happened under the new US administration is a different category of event, and the numbers make the case on their own. By mid-April we're looking at 125% on US goods entering China and up to 145% on Chinese goods entering the US. Nobody sets a rate like that expecting the goods to keep moving. A tariff at 25% is a tax, it changes the price of trade. A tariff at 145% is an embargo wearing a tax's clothing, it ends the trade and keeps the paperwork. That distinction matters for everything that follows, because the analysis of a tax and the analysis of an embargo are entirely different exercises, and most of the commentary I've read is still running the tax analysis on what has become an embargo.
The legal machinery behind this is a stack of instruments rather than a single policy. On the US side there's the old Section 301 investigation into China's technology transfer practices, which had already put rates of up to 25% on roughly $360 billion of goods and has since been pushed higher, up to 100% in some cases, on strategic categories, semiconductors at 50% from 1 January 2025, certain steel and aluminium products, and the machinery classifications in Chapters 84 and 85 that aerospace manufacturing leans on heavily. Exclusions are functionally gone, most of the old ones expired and the limited window for machinery exclusions closed in March. Then there's Section 232, reinstated in February 2025 and effective 12 March, which puts a universal 25% tariff on all imported steel and aluminium plus derivatives, with the country exemptions for Canada, Mexico, and the EU removed and the product exclusion process dead. And then there's the layer where things went properly off the rails, the use of the International Emergency Economic Powers Act to stack additional tariffs, 10%, then another 10%, then further escalations, until the combined rate on many Chinese goods reached that 145% figure by mid-April, with some electronics getting a partial reprieve from the top rates while still carrying the earlier ones.
China matched the rates, 125% on US goods, and said openly that this makes US goods essentially unsellable, which is the honest description both sides could have used from the start. But the targeted moves are where the aviation-specific damage sits. Around mid-April, Chinese airlines were ordered to stop accepting Boeing deliveries. China also reportedly suspended the import of US-made aircraft parts, and it's restricting exports of rare earth elements while adding US aerospace and defence companies to its blacklists. The tariff rates are the headline, the parts ban is the story.
The reason aerospace takes this harder than almost any other industry is that a modern jet is possibly the most globally intertwined product human beings make. Boeing, Airbus, the engine makers, GE, Rolls-Royce, the avionics houses, the materials suppliers, the entire structure assumes parts and technology crossing borders with reasonable friction. The industry didn't choose this architecture out of ideology, it chose it because a single country building every system of a competitive airliner at competitive cost is, on the evidence of seventy years of trying, close to impossible. When you push 145% tariffs and outright bans into a system built on that assumption, it doesn't adapt gracefully, it seizes.
Start with what this does to the US builder. An airframe needs aluminium, steel, electronics, and thousands of specialised components, and the arithmetic now runs against every one of them. The aluminium and steel cost 25% more regardless of origin, because the Section 232 tariff is universal. Components sourced from China can carry tariffs stacking up toward 145%. Even a simple fastener made from Chinese steel can see a 70% stack once the layers compound. The US does source a lot of high-grade metal domestically or from allies, but a universal tariff still distorts global flows and availability, and China's export controls on rare earths and other critical minerals sit over the advanced-electronics side of the industry as a threat that hasn't fully landed yet. The pressure concentrates, as it always does, on the smaller tier suppliers who carry the cost increases and the uncertainty with the thinnest balance sheets. And if the reports that China is banning parts exports to Boeing are accurate and enforced, that's not a cost problem anymore, that's a production line stoppage.
The genuinely interesting case, though, is COMAC, because it's where the retaliation logic eats itself. The Boeing delivery ban looks like a gift to the C919, China's narrowbody challenger, a protected domestic market suddenly cleared of its main Western competitor. Except the C919 is itself packed with critical systems from the US and other Western suppliers. CFM engines from the GE-Safran joint venture. Honeywell flight controls. GE avionics. Rockwell Collins communications and navigation. Parker hydraulics. The list continues through most of the systems that make the aircraft an aircraft rather than a fuselage. A 125% retaliatory tariff on those essential imports makes every C919 dramatically more expensive to build, and the parts import ban raises a question I have not seen answered anywhere: was the ban scoped to parts for maintaining existing Boeing fleets, or does it also catch the parts COMAC needs for its own production line? The reports are ambiguous, and I haven't seen official clarification from MOFCOM or the CAAC on this specific point. If COMAC can't get those US systems, its production ramp, targeting roughly 50 aircraft a year, could stall at precisely the moment the domestic market opened up for it. It's difficult to design a cleaner demonstration of how dependent even a national champion project is on the global supply web, or of how retaliation in an interdependent industry lands on your own side of the border.
Everyone else gets hit by the shrapnel. The universal steel and aluminium tariffs reach Airbus like everyone else, and Airbus's Tianjin final assembly line sits exposed if the US parts ban extends to components destined for aircraft assembled there. And all of this arrives in an industry with no slack left to absorb it. The supply chain has been in various states of distress since COVID, labour shortages, MRO backlogs, engine problems, and delivery delays from both Boeing and Airbus were already the standing complaints of every fleet planner I know. A shock of this size hitting a system already running at the edge of its margins does proportionally more damage than the same shock would have done in 2019.
The technology dimension is quieter but probably matters more over a decade. The original Section 301 case was about forced technology transfer, so with tariffs at these levels and that accusation as the founding document, voluntary sharing of sensitive aerospace technology and deep joint ventures are finished for the foreseeable future, and US firms are understandably guarded about intellectual property in any China-facing arrangement. Both sides are now using export controls and blacklists as active instruments, the US restricting advanced chip technology going in, China restricting critical materials coming out and cutting off US aerospace and defence firms through its Unreliable Entity List. R&D partnerships and academic exchanges, the unglamorous plumbing through which aerospace innovation actually moves, are freezing under the political risk. Both countries are explicitly de-risking toward separate, more resilient supply chains, accepting the efficiency loss as the price. Technology access has been weaponised, and the long-run cost of that is slower progress, higher costs, and quite possibly incompatible technology ecosystems, which for an industry whose entire safety and operational model rests on global interoperability is a more serious outcome than any single quarter's tariff bill.
For airlines, the immediate effect lands on deliveries, which were already running years late. The Chinese delivery stop around 15 April stranded aircraft that were ready to hand over and touches roughly 179 planned deliveries to the major Chinese carriers through 2027. For Boeing, losing access to a market projected at around 20% of global demand is strategically severe, and the pain doesn't stop at the airframer, it runs through the entire US supplier network behind it. For the Chinese carriers, the problem inverts, they can't take the aircraft their fleet plans assumed, and the US parts ban creates something worse than a fleet-planning problem, a maintenance problem. Those fleets depend on US-sourced parts for everything from navigation to landing gear, stockpiles are limited, perhaps three to six months, and a 125% tariff makes replenishment economically absurd. The plausible endpoint is grounded aircraft, and we've watched this film before with the Russian fleet after sanctions. Certifying non-US alternative parts is a long and expensive road, and it wouldn't surprise me if Beijing ends up providing financial support to bridge the gap.
Airbus, holding more than 50% share in China already, looks like the obvious beneficiary, and Tianjin strengthens the position. But the same open question hangs over them, if the parts ban catches US components going into Airbus aircraft assembled in China, the advantage narrows considerably. The C919 gets its domestic opening only if it can physically build aircraft, which brings us back to the catch-22 above. And the undelivered Boeings, the white tails, will likely be redirected to carriers in India, the Middle East, and anywhere else desperate enough for lift, which eases a few waiting lists slightly at the cost of a messy global reshuffle of delivery positions.
On the jobs question, tariffs are sold as protection for workers, and the record from the earlier tariff rounds says the opposite for complex industries. Jobs did appear in the directly protected sectors, primary steel among them, but the net effect on manufacturing overall was negative, because tariffs raise input costs for every downstream user, which damages competitiveness and exports, and the downstream employment base is far larger than the protected one. Estimates from that period ran to hundreds of thousands of net job losses, and the 2025 tariffs are much harsher, with some projections above 600,000 potential losses economy-wide. Trade uncertainty alone was already the top-ranked concern of US manufacturers in early 2025, before the April escalation. Aerospace is unusually exposed within that picture, globally sourced on the input side and export-reliant on the output side, so it takes the cost shock and the market loss simultaneously. These are also high-paying jobs, averaging above $112,000 in 2023, in an industry already struggling to attract skilled workers, and none of this makes the recruiting pitch easier. On the Chinese side, a stalled C919 means losses at COMAC and its suppliers, and while the long-run response will be a harder push toward self-sufficiency, shifting employment toward domestic R&D and manufacturing, replacing complex Western systems is a very long game, and it's being attempted while the broader Chinese economy is already facing headwinds. My read, and I'll state it plainly, is that for US aerospace the combination of higher input costs and the loss of the Chinese market points firmly toward a net negative on jobs. Isolating the pure tariff effect from everything else moving in the economy is genuinely difficult, but the direction is not ambiguous.
Underneath all of this, the demand for flying itself remains strong, global passenger numbers are setting records, which makes the current situation a supply-side and cost-side crisis layered onto healthy demand rather than a demand collapse. But the macro forecasts now carry the risk language, geopolitics, supply chains, slowdown, and IATA's chief has compared the potential scope of disruption to 9/11 while expecting faster adaptation this time. The tariff shock itself is estimated to shave meaningful points off US and global GDP growth and raise recession risk, and the WTO has warned of something like an 80% collapse in US-China trade if this persists, which would feed back into air travel and cargo demand directly. Airlines will pass on some of the higher costs of aircraft, parts, and maintenance, but sustained cost pressure meeting softening demand compresses margins regardless of what the 2025 forecasts say on paper.
So each of the three airframers is now running a different scramble. Boeing is reselling China-destined aircraft into India and the Middle East, lobbying hard in Washington, diversifying its own supply chain away from China, and absorbing the financial hit. Airbus is trying to convert the opening in China through Tianjin while nervously checking whether the parts ban reaches them, and almost certainly accelerating its own reduction of US and China dependencies. COMAC faces something closer to an existential parts problem, find substitutes for systems that took Western suppliers decades to develop, which is extraordinarily hard, or secure exemptions for its own production line, while pushing for every domestic order it can book.
Where does this leave the industry? My view is that this stopped being a trade spat some time ago and is now an active restructuring of global aerospace. Prohibitive tariffs and weaponised technology access are pushing companies toward regionalised supply chains and, plausibly, toward separate technology ecosystems over the longer run. Airbus may take share in China in the near term, but the aggregate picture is more complexity, higher costs, duplicated effort, and pressure on the global interoperability that this industry's entire operating model has quietly depended on for decades. The era of smooth globalisation in aerospace has hit serious turbulence, and the honest forecast is a more fractured and less certain sky ahead.