Imposing tariffs on aircraft and parts from the US

According to a report on the website of the New York Times on May 9, the Trump administration has begun an investigation into the import of commercial aircraft, jet engines, and related components, which could result in new tariffs being imposed in addition to the current tariffs. According to a federal notice published online on the 9th, U.S. Commerce Secretary Howard Lutnick launched the investigation on May 1 under a provision of the Trade Expansion Act that allows the president to impose tariffs on foreign products for national security reasons. President Trump has already used this authorization to impose tariffs on aluminum and steel, and has initiated similar investigations, including one in April on semiconductors and pharmaceuticals. The U.S. Department of Commerce stated that as part of the new investigation, it will seek industry opinions on issues such as the demand for aircraft, engines, and components and whether this demand can be met domestically in the U.S.; the role of foreign suppliers in the market; the level of support from foreign governments for these companies; and other issues. Imposing tariffs on imported products could harm the aerospace industry. For years, the trade surplus of this industry has been among the largest in all industries, but the industry heavily relies on specialized suppliers located around the world. In some cases, key components may only be produced by a few or one manufacturer. Boeing recently stated that the direct impact of the tariffs currently imposed by Trump is minimal, but expressed concerns that these tariffs could cause losses to its suppliers. Boeing's CEO Kelly Ortberg told Wall Street analysts in April that Boeing has to pay a 10% tariff on wide-body aircraft components imported from Japan and Italy, but expects to recover those costs when selling aircraft. Raytheon Technologies, which manufactures aircraft engines and components, estimated in April that the tariffs this year will result in a loss of $850 million. Another engine manufacturer, GE Aviation, stated that the expected cost of tariffs this year will reach $500 million. According to the Nikkei Asian Review on May 10, the Trump administration revealed on the 9th that it has begun an investigation into imposing tariffs on imported aircraft and their engines. Following automobiles, steel, aluminum, and other products, the U.S. government may impose tariffs on products in new areas, which could significantly affect Japanese companies. The federal bulletin shows that this investigation is being conducted pursuant to Section 232 of the Trade Expansion Act and was initiated by the U.S. Department of Commerce on May 1. The investigation covers not only commercial aircraft and engines, but also the level of dependence on imported parts. The investigation also includes whether specific foreign companies are relied upon to provide the relevant products, and whether foreign governments provide subsidies. If the Trump administration determines that this will have an impact on U.S. national security, it will consider imposing tariffs or restricting the quantity of imports. According to U.S. law, the Department of Commerce has 270 days to complete the investigation. The Department of Commerce has not yet announced the additional tariff rates or whether exemptions will be granted. If the U.S. imposes tariffs on imported aircraft and engine components, it could have a significant impact on Japanese companies.