Le Bourget International Air and Space Show: Trade Wars Precede Aviation Spectacle
Air exhibition extravaganza kicks off at Le Bourget from Monday onwards - Airshow extravaganza kicks off in Le Bourget from Mondays onward
Welcome to the International Air and Space Show in Le Bourget, where the competition between two titans, Airbus and Boeing, usually takes center stage. However, this year, the competition appears overshadowed by apprehensions over the ramifications of U.S. trade policies. Both companies have been vocal about their worries concerning the potential repercussions of proposed high tariffs for their industry.
A Harsher Reality
It's not a simple power tussle anymore. The U.S. government has embarked on a Section 232 investigation into imports of aircraft, engines, and components. This move alarms major U.S. aerospace companies, who argue for a tariff-free regime to uphold their global competitive edge.[1]
The U.S.'s affection for tariffs in trade disputes can spur retaliatory actions from other countries. This vicious cycle would likely inflate costs for both Airbus and Boeing, as they heavily rely on global supply chains and export markets. The recent removal of tariffs on aerospace products from the UK under a new trade deal seems optimistic but underscores the unpredictability of trade policies.[4][5]
The Intricate Web of Global Manufacturing
Given the intricate nature of aerospace manufacturing, tariffs could have a significant impact on the cost structure of both Airbus and Boeing. This might result in increased costs for components sourced from countries hit by tariffs, potentially causing delays in production and squeezing profit margins.[3]
A Step Towards Simplicity
The re-establishment of zero-for-zero tariffs on aerospace products between the U.S. and the UK is being celebrated as a positive development, echoing the spirit of the 1979 Agreement on Trade in Civil Aircraft. This agreement aims to maintain a tariff-free environment for civil aircraft, essential for both Airbus and Boeing in navigating the complexities of the international trade landscape.[4][5]
Hope for Compromise
Although uncertain, there are whispers of potential compromises on tariffs, including talks about excluding aerospace from broader trade deal negotiations. This could offer a glimmer of stability and predictability for the industry, although the long-term implications remain uncharted.[2]
- The European Parliament, deeply concerned about the U.S. trade policies, has voiced its support for major European aerospace companies, pressing for a tariff-free regime to preserve their global competitive edge in the aerospace industry.
- With the intricate web of global manufacturing in mind, the European Parliament urges a step towards simplicity, suggesting that aerospace products should be excluded from broader trade deal negotiations, potentially alleviating the uncertainties and complications faced by European companies such as Airbus.
- As the International Air and Space Show in Le Bourget unfolds, the European Parliament emphasizes the significance of science, industry, finance, space-and-astronomy, and aerospace cooperation within the European Union, recognizing these sectors as critical to maintaining a strong and innovative European industrial base.
