In the first two quarters of 2025, the world has seen the U.S. institute tariffs against the imports of products from a long list of countries. The impacted countries were quick to retaliate with their own tariffs against U.S. imports, and the tariff wars have been a roller coaster of rates, excluded products, exclusions and holds. Clearly, the U.S. and Canadian GA markets are worried—and for good reasons. Prices have been steadily rising on everything—from small consumables products to engines and avionics. It could get worse.
A volatile situation
As you read this article bear in mind that the tariff wars are changing daily, creating a roller coaster ride for consumers, businesses and politicians. On April 9, 2025, the Trump administration abruptly backed off tariffs on most countries for 90 days even as they further increased the tariff rate on Chinese imports to 125 percent. However, while the administration paused the tariffs, it kept in place a 10 percent tariff on nearly all global imports. Tariffs on automobiles, steel and aluminum remain on imports from Canada. During April, Boeing began repatriating aircraft sold to Chinese airlines and returning them to Seattle. This happened after China announced messaging to domestic airlines to stop taking delivery of Boeing products in response to the trade war. It is not clear if the Chinese tariff would apply to the aircraft; if it did, the aircraft price would increase from $55 million to $135 million U.S. dollars. Reuters said it is not known whether Boeing recalled the aircraft or the Chinese ordered it to leave.
If the tariffs remain in effect, aircraft sales and importation will become more costly and complex for both new and used aircraft. While many GA aircraft (Cessna and Piper) were built in the U.S., the country of origin becomes the acid test for importing an aircraft into the U.S. to determine the amount of the tariff (if any). On the surface, this does not seem to be challenging. After all, Cessnas and Pipers have been built in the U.S. since the dawn of time. However, with the majority of the GA fleet being 40 years old or more, the upgrade history for U.S.-built aircraft exported to foreign countries will impact whether the aircraft will be exempt to the tariff (when being imported back to the U.S.). Have the aircraft’s upgrades (engine overhaul/replacement, avionics, paint and interior upgrades) substantially transformed the aircraft, making it ineligible for U.S. tariff relief? Although Lycoming, Continental and some Garmin products are manufactured in the U.S., other products might be manufactured overseas. When considering purchasing a used foreign aircraft, due diligence into the history of the aircraft will serve you well when it comes time to import the aircraft.
Patriotic uproar
As recently reported at sister publication AVweb, a lively debate has emerged on the Canadian Owner and Pilots Association Facebook page on whether or not Canadian pilots should attend AirVenture this coming July. The levying of stiff tariffs on Canadian goods and repeated comments by President Donald Trump suggesting the 158-year-old country should become the 51st state have unleashed a wave of patriotism, and that has apparently influenced the flight plans of Canadian pilots, particularly when it comes to making the trek to Oshkosh. “Not a chance. Only when the Trump regime is gone will I consider crossing the 49th,” said one of about 100 COPA members commenting on the post. That sentiment seems to be in the majority of this Facebook post and is not at all representative of Canada’s pilot population. But a significant number of commenters dismissed the current tensions as political bickering that shouldn’t impact aviation. “I will be going, life is too short, and while having your own personal protest might make you feel better, it will have a negligible effect on the U.S. economic machine at the end of the day,” said another commenter. Many Canadians are canceling travel plans in the U.S. (Delta Air Lines became the latest to cut service to Canadian cities in late April 2025) and avoiding buying U.S. goods when Canadian-made versions are available.
Effective February 4, 2025, the Canadian government imposed a 25 percent tariff on $30 billion in goods imported from the U.S. These tariffs only apply to goods originating from the U.S. During February 2025, both Canada and U.S. officials had a roller coaster of information and discussions regarding tariffs. On February 3, 2025, Canada and the U.S. agreed to delay the imposition of their respective tariffs on imported goods. U.S. goods and services trade between Mexico and Canada totaled an estimated $1.8 trillion in 2022. U.S. exports were $789.7 billion and imports were $974.3 billion. The U.S. goods and services trade deficit was $184.6 billion in 2022.
From the U.S. Embassy and Consulates in Canada: “Until the crisis is alleviated, President Trump is implementing a 25 percent additional tariff on imports from Canada and Mexico, and a 10 percent additional tariff on imports from China. Energy resources from Canada will have a lower 10 percent tariff.”
Canada’s defensive
On February 1, 2025, the Honourable Dominic LeBlanc, Minister of Finance and Intergovernmental Affairs, and the Honourable Mélanie Joly, Minister of Foreign Affairs, announced that the Government of Canada is moving forward with 25 percent tariffs on $155 billion worth of goods in response to the “unjustified and unreasonable tariffs” imposed by the U.S. on Canadian goods. These countermeasures have one goal: to protect and defend Canada’s interests, consumers, workers and businesses.
The first phase of Canada’s response will include tariffs on $30 billion in goods imported from the U.S. The list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics and pulp and paper. From an aviation perspective, aircraft tires are in the scope of the Canadian tariff.
Minister LeBlanc also announced that the Canadian government intends to impose tariffs on an additional list of imported U.S. goods worth $125 billion. A full list of these goods will be made available for a 21-day public comment period prior to implementation and will include products such as passenger vehicles and trucks (including electric vehicles), steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles and recreational boats. Canadian countermeasures have been delayed, but if implemented would remain in place until the U.S. eliminates its tariffs against Canada. Canada’s countermeasures do not apply to U.S. goods that are in transit to Canada on the day on which the tariffs come into force.
Aircraft sales
The General Aviation Manufacturers Association (GAMA) 2024 year-end report showed a total of 4118 aircraft and helicopters shipped last year, with total billings of $31.18 billion. European manufacturing accounted for 859 aircraft. GAMA issued a statement before the reprieve. “Given the global nature of the aviation manufacturing industry, these proposed tariffs, as well as potential reciprocating tariffs, could have an enormous impact with many unintended consequences on the industry.”
It noted that almost half the total revenue from GA manufacturers comes from exports, about $5.2 billion in 2023.“Tariffs would affect the intricate and very complex global supply chain that can take years to establish given that it relies on suppliers with unique capabilities that are highly regulated and therefore cannot be easily replaced,” GAMA said.
Canadian aircraft manufacturer deliveries include (and these are in U.S. dollars): Bombardier at 146 aircraft and $6.996 billion and Diamond Aircraft at 252 planes and $205 million. Its current backlog is valued at $14.4 billion (as of December 31, 2024). De Havilland’s aircraft sales and deliveries are not publicly disclosed.
As the tariff wars have deepened, bringing China into the forefront, the Chinese government is taking their own steps. It’s been reported that China’s government has told airlines to stop taking delivery of Boeing jets as it squares off with the U.S. in a tariff-driven trade war. Bloomberg first reported the decision by Beijing, which also includes stopping the import of parts and supplies from U.S. aviation companies. Other media are citing Bloomberg’s report but haven’t been able to immediately corroborate the account, which is based on comments from unnamed sources. However, President Trump appeared to confirm the report in a Truth Social post. “Interestingly, they just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft,” the president wrote. Boeing shipped 130 aircraft, most of them 737s, in the first quarter of 2025, but it’s not clear how many of those went to China. Bloomberg said in its report that Boeing was preparing to send about 10 737s to China when the order from Beijing was sent. The move came after China boosted tariffs on U.S. goods to 125 percent in response to Trump raising the tariff on Chinese imports to 145 percent. It’s not clear how long the Boeing ban will be in effect, but some analysts are predicting it will be used as a bargaining chip in negotiations between the two countries.
Alphabets weigh in
The National Business Aviation Association (NBAA) issued a statement that applauded the pause in the tariff action, saying that the industry is reliant on a complex system of international agreements that ensure safe production of aviation products. In a press release, NBAA said, “Disruptions to this system have profound consequences, and workarounds that meet the exacting regulatory requirements take months or years to establish—challenges clearly demonstrated during the COVID pandemic. As with the pandemic, NBAA has concerns regarding tariffs, or anything else that could disrupt the industry’s unique supply chain, and the jobs, economic growth, manufacturing leadership and innovative edge that depend on it.”
In a February 3, 2025 briefing document, the Canadian Business Aviation Association (CBAA) stated: “This Executive Order signals a significant shift in U.S.-Canada trade relations, with potentially broad economic consequences. If Canada responds with countermeasures, the business aviation industry may see disruptions in cross-border travel, higher operating costs and potential regulatory hurdles. The situation warrants close monitoring, especially for stakeholders in aircraft operations, manufacturing, and supply chains. The CBAA is committed and working with both industry partners and government to ensure that the concerns for business aviation are addressed, and any threats are mitigated.”
Anthony Norejko, president and CEO of CBAA, reports: “Canada needs to negotiate from a position of strength. With the Luxury tax and an impending tariff, BA will be seeing serious headwinds during these tumultuous times. We need a strong Canadian government with serious leaders who can help navigate these issues,” he said.
As part of the alphabet soup response, AOPA and 14 other industry organizations sent a letter to the Secretary of the U.S. Department of Transportation: “The aviation supply chain involves tens of thousands of suppliers from all over the globe which provide parts, platforms and systems that require safety approval for use and installation, all of which may not be easily replaced or substituted.
“Given this reality, it is essential that both government and industry work together to minimize cost and availability disruptions in the aviation supply chain, which in many cases cannot be easily or quickly addressed. We believe such dialogue and analysis will benefit the competitiveness of the U.S. aviation manufacturing and maintenance sectors and will be critical as the industry continues to improve safety, innovate and contribute positively to the U.S. balance of trade. We would like to request a meeting to discuss the state of the aviation industry and recommendations to move it forward. The industry’s position can be improved by government policies and actions focused on strengthening aviation safety agreements, policies, and investments to bolster innovation, as well as measures to address specific aviation supply chain challenges. Given these factors, we ask that you provide an exception for aerospace from any tariff consideration to give time to consider all relevant policies to bolster industry competitiveness and ensure there are no unintended consequences.”
In early April 2025, the NBAA News Hour held a panel conversation delivering perspectives for aircraft brokers, attorneys, financial professionals, operators and other industry professionals. Ehsan Monfared, Partner, YYZlaw reports: “We’re seeing more concerns from macroeconomic impacts by our clients buying or selling aircraft over the last couple months. Many buyers and sellers have accelerated the process to complete the importation process into the United States and as much as possible, we’ve been negotiating in terms into the purchase agreements to deal with all the uncertainty that these rolling announcements have created. You’re seeing behaviors change already. If the stock market is any indication and the drop in consumer spending that’s associated with the uncertainty, the likelihood that the cost of just basic goods for consumers goes up, will put a broader damper on consumer spending and that’s always been a leading factor in terms of our clients making decisions to invest into business aircraft.”
Emily Deaton, CEO of JetAviva, says, “I think it’s important to be proactive in trying to understand what the implications are going to be. I think that it will require talking to experts and asking the right questions and letting them look at your operation and understanding how these new policies could affect you. It’s just a good idea to start the process now, not only when you’re in a transaction. One of the things that I always counsel and I would further say is critical today is you want to build a really strong team around the transaction. That is even more critical today than it was a year ago. You should be working with tax and legal counsel and have everyone that’s going to touch that airframe understanding that this is a critical component of the process. It deserves everyone’s clarity and attention. You should be working with an accredited dealer broker and to have representation and not go it alone.”
Losing the competitive edge
From an economist’s perspective, financial impact of tariffs is designed to protect domestic labor. However, in this case, the weaponization of tariffs was strictly used to achieve other political goals. Economically, for many airframe manufacturers (e.g., Piper, Daher/Kodiak, Textron), Pratt and Whitney turbine engines, used on Piper M700, Kodiak and others, would increase their cost of goods sold by 25 percent. On a $1 million dollar engine (an example), this would increase the cost of the aircraft by $250,000 U.S. dollars. However, the OEM may choose to add margin to their cost of goods sold—say 25 percent. This would see the end user acquisition cost increase by $312,500.
For Canadian purchasers, the aircraft’s price (in 2025 dollars) of $4.32 million would increase to $4.63 million. However, if Canada extends its tariff (25 percent) to the aviation sector (the current proposed phase-one tariff has aircraft tires in scope) the price of the Piper M700 would increase to $5,796,875—an impact of $1,471,875.
Aircraft manufactured in Canada, e.g., Diamond, Bombardier and De Havilland, could become uncompetitive. Large fleet sales to American flight training units may be impacted, causing OEMs to reduce their Canadian labor force. From a taxation perspective, corporate tax contributions to the Canadian coffers would be reduced. Smaller Canadian manufacturers, like Insight Avionics, which began designing and manufacturing graphic engine monitors in 1981, will be at a competitive disadvantage against U.S. instrument manufacturers which, if unchecked, will impact sales. Insight is taking a wait-and-see approach. However, the impact to both the Ontario and federal tax bases would be further impacted by laid-off employees who reduce personal spending while collecting unemployment insurance.
As the U.S. Customs and Border Protection and the Canadian Border Services Agency become acquainted with the tariffs, customs clearance delays may occur as imported aircraft await inspection and possible documentation issues. Aircraft importation is a complex process that involves navigating many taxation, regulatory and compliance issues. Customs duties, GST/HST and regulatory compliance will impact financial and legal considerations, which for the uninitiated could cause delays, additional costs and potential penalties. The first step in the importation process is to understand the regulatory requirements imposed by Transport Canada and the CBSA. These regulations govern everything from the condition and documentation of the aircraft to the payment of applicable duties and taxes. Currently there is some fear, uncertainty and doubt regarding the process.
Eric Martel, president and CEO of Bombardier, said, “In light of the rapidly evolving landscape stemming from the February 1, 2025 executive orders signed by the President of the United States regarding new tariffs, Bombardier has elected to defer providing guidance and 2025 objectives.” Further, Bombardier’s website states: “In light of the rapidly evolving schedule for tariff implementation and the effects they may have, Bombardier has elected to defer providing guidance and 2025 objectives, until the Corporation has had the opportunity to further assess the direct and indirect impacts to its business of such tariffs, retaliatory tariffs or other trade protectionist measures implemented as this situation develops. Bombardier’s long-term priorities and strategic orientation remain intact, including plans for continuing growth in its Defense and Services businesses and continued de-leveraging.“
Bombardier customers operate a fleet of more than 5100 aircraft supported by a vast network of Bombardier team members worldwide and 10 service facilities across six countries. In 2024, Bombardier delivered 124 aircraft, with 50 to 60 percent of the Challenger aircraft delivered to U.S. customers. With sophisticated customers who understand the financial markets, Bombardier has not seen sales decline in Q4 of 2024 and Q1 of 2025. Bombardier’s U.S. presence sees activity in 47 states, with over 10,000 jobs delivered directly by Bombardier and its suppliers. A tariff and rate adjustment would see a greater impact in the U.S. than Canada; however, the company has been busy running financial modeling based upon a variety of scenarios. With the duration of the tariff, the mechanisms surrounding collection and which transactions would be in scope as an unknown, Bombardier is taking a bullish outlook to the impact to their book of business. With North American aerospace and aviation so integrated, Bombardier believes that this sector would be excluded from the tariff.
On February 20, 2025, Daher—the French manufacturer of the TBM and Kodiak line of turboprop singles—released the following:
“As the scope of the Trump administration’s tariffs is evolving, it is too early to assess potential effects for operations, pricing, the supply chain, etc. Because the aerospace industry is so interconnected and worldwide in scale, tariffs could bring harm to both America and Europe. The industry’s importance to the U.S. economy is underscored by the recent study sponsored by GAMA (the General Aviation Manufacturers Association) and seven other associations, which determined that general aviation supports a total 1.3 million jobs and a total of $339.2 billion in total economic output in the U.S. As a reminder, general aviation was excluded from tariffs eight years ago during the first Trump administration based on its ‘interconnectivity’ with the U.S. economy. In 2023, Daher announced its intention to create a third final assembly line for the company’s TBM and Kodiak general aviation aircraft families. The primary purpose of this new final assembly line (to be located at Daher’s Stuart, Florida, aerostructures manufacturing facility) is to provide additional output in response to the continuing sales success for both the TBM (built in Tarbes, France) and the Kodiak (built in Sandpoint, Idaho). Based on the current political climate, creating additional production capacity for TBMs that are ‘built in America’ could represent another advantage for Daher’s new Stuart, Florida, final assembly line.”
It’s just bad for business
From a GA and BA local perspective, the Pitt Meadows Regional Airport (CYPK) in Canada sees the tariff impacting the attraction of U.S.-based aircraft and entrepreneurs who leverage the foreign exchange rate to reduce their total cost of ownership and who view CYPK as an airport to create new businesses. Guy Miller, general manager at Pitt Meadows Airport, reports: “The tariff is not great for businesses operating out of our airport. We see a lot of U.S.-based aircraft coming to Pitt Meadows for avionics work and helicopter maintenance, leveraging the weaker Canadian dollar. That competitive advantage will be neutralized by the tariff and will have inflationary impacts, causing costs to go up. Our concern is the financial impact to businesses who call Pitt Meadows their home,” he said.
Interestingly, the current tariff wars fly in the face of the North American Free Trade Agreement (NAFTA). On November 30, 2018, Canada, the United States and Mexico signed the new Canada-United States-Mexico Agreement (CUSMA), during the G20 leaders’ summit in Buenos Aires. Under the agreements, tariffs on virtually all originating goods traded between the U.S., Canada and Mexico were eliminated in 2008, except for Canadian agricultural goods in the dairy, poultry, egg and sugar sectors (which are exempt from tariff elimination). The wide scope of the agreement is indicated from the outset in agreed objectives.
The agreement can eliminate barriers to trade in goods and services between the three countries, facilitate conditions of fair competition within the free-trade area, significantly expand liberalization of conditions for cross-border investment, establish effective procedures for the joint administration of the agreement and the resolution of disputes and lay the foundation for further bilateral and multilateral cooperation to expand and enhance the benefits of the agreement. The agreement was replaced in July 2020 with the United States-Mexico-Canada Agreement (USMCA). The current situation initiated by the U.S. appears to contravene this agreement.
Like the automotive industry, the North American aviation and aerospace industries are intertwined with raw materials, like aluminum as an underlying component. In 2023, the U.S. produced 860 thousand metric tons of aluminum refined metal ore at six smelters (plus 3.4 million tons of recycled aluminum). Total U.S. imports of aluminum metal and alloy was 2.6 million tons (to August 2023). In 2023, Canada produced 3.3 million tons of aluminum. Canada is the world’s fourth-largest primary aluminum producer, following China, India and Russia. The transportation sector uses 29 percent of the worldwide aluminum. With a U.S. 25 percent tariff on aluminum, the cost of U.S. domestic aircraft manufacturing will naturally go up. For Canadian GA aircraft manufacturers, the impact is even worse. At least one GA aircraft manufacturer stated that their supply chain sees the purchasing of formed aluminum components from U.S. fabrication companies. In this case, the worst case is an increase of 25 percent for the U.S. aluminum components fabricator, which is then shipped back to Canada, with a further 25 percent tariff. The final price of the aircraft is not increased by 50 percent, as aircraft manufacturers are not disclosing the cost of raw materials to build their aircraft. However, the impact for this Canadian aircraft manufacturer is the sale of aircraft and parts has slowed down, impacting its employees with looming layoffs. The challenge is that the U.S. importation tariffs will have a cumulative impact with a substantial amount of raw materials (aluminum, semiconductors, etc.) being in scope to the tariff.
Fortunately, aviation avionics manufacturer Garmin manufactures many aviation and automotive OEM products at the U.S. headquarters in Olathe, Kansas. More than 4000 Garmin employees produce, assemble and distribute thousands of products and circuit boards within their 490,000-square-foot manufacturing and distribution facility. However, how many components in Garmin hardware—like semiconductors—are imported from countries in scope with the U.S. semiconductors tariff? Garmin employs 21,000 people in 35 countries around the world.
One well-known aviation brand, which wishes to keep a low profile in this debate, has many components of their products sourced from China. While assembly is performed in the U.S., the firm is looking for U.S. companies who can provide components at the same quality and cost levels as China. Looking back in the rearview mirror, this company was able to weather the COVID storm without any price increases through reducing profit margins. However, a 125 percent tariff will impact its cost structures significantly, causing the rise in costs to be passed onto the consumer. Fortunately, it has inventory for the next 90 days on hand, so prices may not be impacted in the short term. During this exclusive interview, the CEO of this company said: “We’re focused on creating high-quality products that improve safety at a price that our customers can afford. But the tariffs are being used as an economic tool because the politics are so gummy and emotional and very complex for simpler retailers. Let’s keep emotions off of the table as we are all just along for the ride.”
Winners and losers
As Investopedia summed it up in part, tariffs on trade have both winners and losers. Tariffs can generate billions of dollars of added revenue for a country. Domestic industries and manufacturers tend to benefit. Consumers and producers who use those products associated with tariffs have to pay higher prices, which can have an inflationary effect on the rest of the economy. As for retaliatory tariffs imposed by foreign countries on the U.S., they make exports more expensive to buyers in those countries but reduce U.S. GDP by a negligible amount.
Some Canadian purchasers of U.S. aircraft feel that the tariff increase in costs will be passed onto their customers. However, the inflationary impact to an industry that has seen a year-over-year rise in costs delivers sizable turbulence to an industry that has many other challenges to deal with. Larger operators and manufacturers may be able to weather the storm, but smaller operators will see the total costs increasing impacted by tariffs and a weak Canadian dollar, all the while trying to remain competitive in a tight market. Only time will tell what impact these tariffs will have on the U.S. aviation market, but it’s certainly cause for concern.