US and EU Aerospace Sector May Face Trade and Regulatory Impacts Under Trump Administration

We assess whether trade policy between large aircraft manufacturers will likely flare up based on President-elect Donald Trump’s previous administration policy and 2024 campaign positions.

Why It Matters

Boeing BA remains the largest single exporting company in the United States, thus inextricably interwoven with US trade policy. Airbus EADSY, Bombardier BBD.A, and Embraer ERJ are high-dollar importers into the US, but from regions that have drawn less trade scrutiny than China. In 2019-20, the 17-year trade dispute based on mutual accusations of illegal government subsidy between Boeing and Airbus via the World Trade Organization culminated in escalating tariffs on aircraft, aircraft parts, and consumer items like wine, cheese, tobacco, and spirits. By June, 2021 US and EU trade authorities had agreed to suspend their dispute for five years in the name of cooperation versus emerging aerospace industrial development fostered in China, which certified the long-nascent Comac C919 for flight in September 2022.

The Bottom Line

We don’t think trade conditions between the EU and the US or accusations of government subsidy between Boeing and Airbus are likely to reemerge in a second Trump administration, based on the deal reached at the end of 2020 and considering they share multiple common suppliers that export to one another’s markets. Although Comac’s C919 has entered service, we believe it will take many years for production to ramp up meaningfully. We do not anticipate any imports to US operators in our explicit five-year forecast, nor for some time thereafter, independently of whether any trade sanctions were applied.

However, tariffs on imports feature prominently as a policy tool in the 2024 Republican platform, though often with reciprocal or transactional conditions attached. So, while we cannot rule out their application broadly, we aren’t currently factoring them in.