Navigating tariff exemptions for aircraft components

Increased, reciprocal, imposed, paused. Words frequently used in describing tariffs President Donald J. Trump proposed in changes to U.S. trade agreements April 2, 2025.

The policy puts an additional duty on imports from all trading partners starting at 10%, with initial increases to 11% to 50% depending on the nation. Some imports are exempt, notably those already given preferential treatment in the United States, Mexico, and Canada (USMCA) trade agreement. Imports of aluminum and steel are covered by section 232 of the Trade Expansion Act of 1962 and amendments.

However, imports of aircraft, their parts, and components haven’t been fully explained, leading to uncertainty in the aerospace supply chain. The 1980 World Trade Organization (WTO) Agreement on Trade in Civil Aircraft (CAA) generally exempts aerospace components from tariffs. The United States allows duty-free entry of CAA-covered products and articles regardless of country of origin, according to the Aeronautical Repair Station Association.

Seeking greater clarity, I contacted global management consulting firm McKinsey & Co. and their aerospace experts to ask, “Are commercial aircraft components exempt from tariffs?”

McKinsey & Co. analysts answered, “Commercial aircraft and their parts/components are generally exempt from normal customs duties and can enter the U.S. duty-free under Harmonized Tariff Schedule of the United States (HTSUS) Chapter 88, with 8807.10.00 commonly used for aircraft parts.”

However, under the April 2, 2025 executive order, the consulting company’s experts say, “Such goods are still subject to any additional duties and tariffs, such as those imposed by the Trump Administration under Sec. 301, 232, and the International Economic Emergency Powers Act (IEEPA), and any applicable antidumping and countervailing duties that may apply to a given product.”

But there may be exemptions, the analysts report: “Whether a specific good is now subject to duties or not requires a fact-specific analysis under the new tariff regime driven by its composition, specifications, and country of origin. Some importers who previously entered aircraft parts and components duty-free under Chapter 88 who are now facing Trump Administration tariffs are considering whether they can be exempt from such tariffs through USMCA or another carve out.”

Additionally, “Temporary import bonds, bonded warehouses, and Foreign Trade Zones are creating cases where commercial aircraft components may be exempted from tariffs, if goods will be subsequently exported from the United States.”

The process of calculating the amount of duties or tariffs owed is significantly more complex now due to the possibility of multiple, applicable tariffs. McKinsey & Co. consultants note customs brokers can help manage the complexity and confirm the correct duty/tariff rate owed for a specific import. Or, the experts advise, “Companies could build up internal teams and processes, and invest in automation where possible, to manage this complexity and address new tariff challenges, and use licensed customs brokers to confirm the correct duty/tariff rate owed for a specific import.”

We’ll try to further clarify aerospace tariffs once we know more. – Eric