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GE Aerospace CEO Culp advocates tariff-free regime for aviation industry
GE Aerospace CEO Larry Culp said on Tuesday he advocated re-establishing a tariff-free regime for the aerospace industry under the 1979 Civil Aircraft Agreement when he met with U.S. President Donald Trump.
In an interview with Reuters, Culp said the company's position was "understood" by the administration, adding that the zero-duty regime has helped the U.S. aerospace industry to enjoy a $75 billion annual trade surplus.
"I have argued that it was good and would be good for the country," Culp told Reuters.
Trump's trade war has created the biggest uncertainty for the aerospace industry since the COVID pandemic. It has also led to a breakdown in the industry's decades-old duty-free status, putting aircraft deliveries in limbo.
The uncertainty has left some of GE Aerospace's customers struggling to accurately forecast their business. Meanwhile, one of its prominent suppliers Howmet Aerospace has warned that it may halt some shipments if they are impacted by tariffs.
Culp said the company has not seen any disruption in deliveries from Howmet. The Pittsburgh-based supplier is currently working on the new high-pressure turbine blade for the Leap 1A engine, which GE Aerospace produces in a joint venture with France's Safran SA.
"That ramp has gone very well so far here in 2025," he said.
GE Aerospace has been grappling supply chain challenges, leading to a drop in engine deliveries over the past year. Last week, Airbus said it was facing challenges with engine deliveries as CFM was "significantly behind the curve." Culp said the company is "well aligned" with the European planemaker's needs for this year, but added the tariffs have created supply chain risks.
Tariffs are estimated to cost GE Aerospace more than $500 million this year. The company is making greater use of foreign trade zones and available trade programs like duty drawbacks to mitigate the impact. It is also employing cost controls and a tariff surcharge to protect its margins.
Trade-induced economic uncertainty has taken a toll on travel demand as well. With travel spending softening, there is a growing risk airlines could start deferring their engine orders.
Culp said other carriers would step in if any airline decides to halt its deliveries. "There are plenty of other people who will step up in line and take their place," he said.
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