Tariffs upend Boeing supply chain that sustains U.S. jobs, exports

Boeing’s 787 Dreamliner jet is a multinational concoction, made of parts from around the globe. Wings from Japan. Doors from France. Portions of the fuselage are built in Italy before they are shipped to the United States to be assembled by workers in South Carolina.

It’s an arrangement made possible by a nearly 50-year-old trade agreement that allowed Boeing and other players in the U.S. aerospace industry to sell airplanes and buy parts from anywhere in the world, duty-free.

Now President Donald Trump’s global tariffs threaten to disrupt this interlocking supply chain. For the first time in nearly half a century, Boeing will pay a levy to import those wings, doors, and other components. For now, there is a new 10% tax on most imports. But that levy could rise depending on what the president decides during a 90-day reprieve he declared before stiffer tariffs land on most countries.

While Trump has said his sweeping protective tariffs will reduce the U.S. trade deficit, the levies on Boeing’s parts supply line will tax a company that is America’s biggest exporter of goods. About 80% of Boeing’s multimillion-dollar planes are shipped to overseas customers.

“These tariffs and trade restrictions have unleashed chaos in the global aerospace and airline industry,” said Ken Quinn, a partner at Clyde & Co. and former general counsel at the Federal Aviation Administration. “It’s only harmful and destructive.”

Trump’s trade war also is causing retaliatory moves that could hurt Boeing. On Wednesday, conflicting news reports suggested China had directed its national carriers to stop ordering or accepting new Boeing planes. Trump then posted on Truth Social that China “just reneged on the big Boeing deal, saying they will ‘not take possession’ of fully committed to aircraft.” Trump did not elaborate on what deal he was referencing, adding to the confusion. Boeing, based in Arlington, Va., did not respond to requests for comment.

Boeing is not the only aerospace company with international operations coping with the effects. Airbus, the European aerospace manufacturer that has an assembly operation in Alabama, said it is assessing impacts. Other international vendors that make everything from engines to landing gear face disruption.

Experts say it makes little sense to apply tariffs so broadly that they burden the biggest U.S. exporters.

“I absolutely agree that there are certain countries, most notably China, that have mistreated the United States when it comes to trade,” said Scott Hamilton, managing director at Leeham Company, an aviation consultancy firm. “But you just don’t go out there with a sledgehammer. You gotta go out with a ball-peen hammer to deal with this stuff.”

The 1980 Agreement on Trade in Civil Aircraft governs how companies do business around the world and is credited with opening markets to U.S. aerospace products, particularly in Europe. Dak Hardwick, vice president of international affairs for the Aerospace Industries Association, an industry trade group, said the trade pact has translated into a more than 2,000% increase in U.S. exports over a 40-year period.

The suspension of the agreement has confounded many experts and industry officials. Richard Aboulafia, a managing director at Aerodynamic Advisors, said it makes no sense given the industry enjoys a “monster trade surplus” in the United States.

The American aerospace industry exported $136 billion worth of goods in 2024, helping to lower the overall U.S. trade deficit by 13%, according to Morningstar. Aerospace was second only to the oil industry in exports. The administration did not respond to questions about the 1980 trade pact and why it thinks tariffs should be imposed on aerospace companies.

Parts for the 787 come from around the world to Boeing’s factories in Charleston, S.C., which employ about 7,800 workers. The largest components, such as wings and fuselage sections, arrive from aboard air freighters dubbed “Dreamlifters” with cavernous cargo bays, which Boeing built especially for the job.

Trump visited the factory in 2017, only a month after he was inaugurated for his first term, to celebrate the plant as an example of American manufacturing while denouncing companies that offshore their work.

“Our goal as a nation must be to rely less on imports and more on products made right here in the U.S.A.,” he told the crowd then. “I don’t want companies leaving our country, making their product, selling it back, no tax, no nothing, firing everybody in our country.”

Trump’s tariffs have set off a private lobbying effort as the aerospace industry seeks to minimize the impact, according to one industry leader who spoke on the condition of anonymity because of the sensitivity of negotiations.

“There are war rooms being set up at suppliers across the industry,” said Kevin Michaels, a managing director at AeroDynamic Advisory. He said companies will have to negotiate with their customers who will pay the higher costs.

Boeing imports parts built at its production facility in Sheffield, England, which the company opened in 2018 to manufacture high-tech components for the next generation 737, the 737 Max and 767 aircraft. The company also sources approximately $1.25 billion a year worth of parts from a network of more than 300 suppliers in India, where it directly employs 7,000 people, while an additional 13,000 people work for other partners in its supply chain, according to the company’s website.

Boeing’s plant in Ridley Park, Delaware County, produces Chinook and Osprey helicopters. The Boeing plant and the company’s engineering unit in Delaware County employ around 3,500 people.

Airbus employs more than 5,000 people in the United States. It has 2,000 employees in Mobile, Ala., alone, where workers assemble the company’s A220 and A320 jets at a 53-acre campus. Like other major aerospace companies, Airbus sources parts from around the world, but the company says the United States is its largest source, an example of how intertwined international companies are with the U.S.

The company’s arrival was transformational, said Bradley Byrne, CEO of the Mobile Chamber. Airbus broke ground on the factory in 2013, and workers began assembling A320 jets two years later. (Mobile landed the Airbus assembly plant after losing its bid to be home to Boeing’s 787 Dreamliner campus, which went to Charleston.) It’s helped the community attract more businesses as suppliers seek to be closer to the company that buys their products.

Byrne has been in close contact with the company, most recently receiving assurances that it is moving forward with plans to open a third manufacturing line in Mobile, which would add 1,000 jobs. Still, Byrne can’t help but worry.

“We don’t know, and Airbus doesn’t know, what impact [tariffs] could have on the number of orders that they get,” he said.

For its part, Airbus said it is trying to figure out the effect tariffs will have.

“Like others in the industry, we are actively assessing the impact of these trade policy changes on our operations and supply chain, and are working closely with our customers and suppliers to evaluate how best to navigate these evolving conditions,” the company said in a statement.

A crucial question roiling the industry is who will pick up the tab for U.S. tariffs. In an earnings call this month, Delta Air Lines CEO Ed Bastian said the carrier will not be responsible for the additional costs on the jets it expects to receive from Airbus this year.

“These times are pretty uncertain, and if you start to put a 20% incremental cost on top of an aircraft, it gets very difficult to make that math work,” he said.

Howmet Aerospace, a Pittsburgh-based company that supplies components for jet engines and counts Boeing and Airbus among its customers, has warned that it might halt some shipments because of tariffs, according to Reuters. In a letter sent to customers, the company said it may not be able to honor contract prices.