Latest news with #AgreementonTradeinCivilAircraft
RTÉ News
6 days ago
- Business
- RTÉ News
AerCap CEO calls on Trump to expand zero-tariff plane pact
The head of the world's largest aircraft leasing company has called on US President Donald Trump to renegotiate and expand a duty-free trade agreement for the aircraft industry to include newcomers like China in a new lobbying twist to the trade war. The aerospace industry has for weeks been pushing for exemptions to tariffs introduced by Trump, or to any foreign retaliation, and wants a return to the status quo represented by a 1979 deal between some 30 nations to ban tariffs on jetliners. But Aengus Kelly, chief executive of AerCap, said the current trade crisis also represented a chance to expand and improve the decades-old pact to ensure a level playing field under what he termed a "Trump trade accord" for aviation. "It would be a fantastic win for the president if he could enhance and significantly improve the 1979 aerospace treaty, which has only got (33) countries signed up to anything, while countries like India and China are not in it," Kelly said. The call for a Trump-led renegotiation marks a shift of emphasis by the aviation industry, which has so far focused mainly on restoring the existing tariff-free regime. Dublin-based AerCap is the world's largest aircraft owner. "If the president could convince other countries to join this zero-for-zero tariff agreement, that'll be an enormous win for high-tech manufacturing and engineering jobs in the United States," Kelly told Reuters in an interview. The White House said it was in regular contact with industry groups about trade policy. "The only special interest guiding President Trump's decision-making, however, is the best interest of the American people," spokesperson Kush Desai said. A coalition of aerospace companies was expected to meet officials at the Commerce Department later today. The Agreement on Trade in Civil Aircraft came into force in 1980 and eliminated tariffs on aircraft and parts. It is one of a handful of side deals that survived from an earlier round of trade talks when the World Trade Organization was formed in 1995. Current members include the United States and European Union - home to Boeing and Airbus - while China, India and several other fast-growing aerospace nations, such as South Korea and Turkey only have observer status. Brazil is in the process of becoming a full member, but Mexico - with its growing supply chain - is not a signatory. The AIA aerospace association has said the 1979 pact supports a $75 billion trade surplus for the US aerospace sector, which includes manufacturing giants like GE Aerospace and RTX. Analysts say a renegotiation would not be simple, however. Trump has shown a preference for bilateral deals over broad alliances from trade to security and a new aircraft pact would include nations already embroiled in a larger jigsaw of trade disputes, making it harder to isolate specific issues. Washington did however grant a carve-out to jet engines in a recent trade deal with Britain, benefiting Rolls-Royce. The call for an expanded pact comes as China is increasing production of a home-grown competitor to Boeing and Airbus, the C919, though it has yet to win Western approvals. Boeing deliveries to China were effectively frozen after the two largest economies imposed triple-digit tariffs on each other last month, before agreeing a pause in trade tensions. Trump also briefly floated heavier tariffs on the European Union, which has placed Boeing on a list of possible reprisals. Kelly said the US would gradually cede aerospace manufacturing in any prolonged trade war. "With very high tariffs, if they're retaliatory, then of course we're going to see the rest of the world move over time towards Airbus," he said, though "It won't happen overnight".
Yahoo
6 days ago
- Business
- Yahoo
Exclusive-Aircraft leasing giant calls on Trump to expand zero-tariff plane pact
By Tim Hepher and David Shepardson PARIS/WASHINGTON (Reuters) -The head of the world's largest aircraft leasing company has called on U.S. President Donald Trump to renegotiate and expand a duty-free trade agreement for the aircraft industry to include newcomers like China in a new lobbying twist to the trade war. The aerospace industry has for weeks been pushing for exemptions to tariffs introduced by Trump, or to any foreign retaliation, and wants a return to the status quo represented by a 1979 deal between some 30 nations to ban tariffs on jetliners. But Aengus Kelly, chief executive of AerCap, said the current trade crisis also represented a chance to expand and improve the decades-old pact to ensure a level playing field under what he termed a "Trump trade accord" for aviation. "It would be a fantastic win for the president if he could enhance and significantly improve the 1979 aerospace treaty, which has only got (33) countries signed up to anything, while countries like India and China are not in it," Kelly said. The call for a Trump-led renegotiation marks a shift of emphasis by the aviation industry, which has so far focused mainly on restoring the existing tariff-free regime. Dublin-based AerCap is the world's largest aircraft owner. "If the president could convince other countries to join this zero-for-zero tariff agreement, that'll be an enormous win for high-tech manufacturing and engineering jobs in the United States," Kelly told Reuters in an interview. The White House said it was in regular contact with industry groups about trade policy. "The only special interest guiding President Trump's decision-making, however, is the best interest of the American people,' spokesperson Kush Desai said. A coalition of aerospace companies was expected to meet officials at the Commerce Department later on Wednesday. U.S. SURPLUS The Agreement on Trade in Civil Aircraft came into force in 1980 and eliminated tariffs on aircraft and parts. It is one of a handful of side deals that survived from an earlier round of trade talks when the World Trade Organization was formed in 1995. Current members include the United States and European Union - home to Boeing and Airbus - while China, India and several other fast-growing aerospace nations, such as South Korea and Turkey only have observer status. Brazil is in the process of becoming a full member, but Mexico - with its growing supply chain - is not a signatory. The AIA aerospace association has said the 1979 pact supports a $75 billion trade surplus for the U.S. aerospace sector, which includes manufacturing giants like GE Aerospace and RTX. Analysts say a renegotiation would not be simple, however. Trump has shown a preference for bilateral deals over broad alliances from trade to security and a new aircraft pact would include nations already embroiled in a larger jigsaw of trade disputes, making it harder to isolate specific issues. Washington did however grant a carve-out to jet engines in a recent trade deal with Britain, benefiting Rolls-Royce. The call for an expanded pact comes as China is increasing production of a home-grown competitor to Boeing and Airbus, the C919, though it has yet to win Western approvals. Boeing deliveries to China were effectively frozen after the two largest economies imposed triple-digit tariffs on each other last month, before agreeing a pause in trade tensions. Trump also briefly floated heavier tariffs on the European Union, which has placed Boeing on a list of possible reprisals. Kelly said the U.S. would gradually cede aerospace manufacturing in any prolonged trade war. "With very high tariffs, if they're retaliatory, then of course we're going to see the rest of the world move over time towards Airbus," he said, though "It won't happen overnight". Sign in to access your portfolio
Hindustan Times
6 days ago
- Business
- Hindustan Times
Aircraft leasing giant calls on Trump to expand zero-tariff plane pact
* Appeal goes beyond previous industry calls for duty exemptions * AerCap CEO urges Trump to broaden and expand existing pact * Decades-old pact includes US and Europe but not China or India * White House says regularly talks to industry groups on policy PARIS/WASHINGTON, - The head of the world's largest aircraft leasing company has called on U.S. President Donald Trump to renegotiate and expand a duty-free trade agreement for the aircraft industry to include newcomers like China in a new lobbying twist to the trade war. The aerospace industry has for weeks been pushing for exemptions to tariffs introduced by Trump, or to any foreign retaliation, and wants a return to the status quo represented by a 1979 deal between some 30 nations to ban tariffs on jetliners. But Aengus Kelly, chief executive of AerCap, said the current trade crisis also represented a chance to expand and improve the decades-old pact to ensure a level playing field under what he termed a "Trump trade accord" for aviation. "It would be a fantastic win for the president if he could enhance and significantly improve the 1979 aerospace treaty, which has only got countries signed up to anything, while countries like India and China are not in it," Kelly said. The call for a Trump-led renegotiation marks a shift of emphasis by the aviation industry, which has so far focused mainly on restoring the existing tariff-free regime. Dublin-based AerCap is the world's largest aircraft owner. "If the president could convince other countries to join this zero-for-zero tariff agreement, that'll be an enormous win for high-tech manufacturing and engineering jobs in the United States," Kelly told Reuters in an interview. The White House said it was in regular contact with industry groups about trade policy. "The only special interest guiding President Trump's decision-making, however, is the best interest of the American people,' spokesperson Kush Desai said. A coalition of aerospace companies was expected to meet officials at the Commerce Department later on Wednesday. U.S. SURPLUS The Agreement on Trade in Civil Aircraft came into force in 1980 and eliminated tariffs on aircraft and parts. It is one of a handful of side deals that survived from an earlier round of trade talks when the World Trade Organization was formed in 1995. Current members include the United States and European Union - home to Boeing and Airbus - while China, India and several other fast-growing aerospace nations, such as South Korea and Turkey only have observer status. Brazil is in the process of becoming a full member, but Mexico - with its growing supply chain - is not a signatory. The AIA aerospace association has said the 1979 pact supports a $75 billion trade surplus for the U.S. aerospace sector, which includes manufacturing giants like GE Aerospace and RTX. Analysts say a renegotiation would not be simple, however. Trump has shown a preference for bilateral deals over broad alliances from trade to security and a new aircraft pact would include nations already embroiled in a larger jigsaw of trade disputes, making it harder to isolate specific issues. Washington did however grant a carve-out to jet engines in a recent trade deal with Britain, benefiting Rolls-Royce. The call for an expanded pact comes as China is increasing production of a home-grown competitor to Boeing and Airbus , the C919, though it has yet to win Western approvals. Boeing deliveries to China were effectively frozen after the two largest economies imposed triple-digit tariffs on each other last month, before agreeing a pause in trade tensions. Trump also briefly floated heavier tariffs on the European Union, which has placed Boeing on a list of possible reprisals. Kelly said the U.S. would gradually cede aerospace manufacturing in any prolonged trade war. "With very high tariffs, if they're retaliatory, then of course we're going to see the rest of the world move over time towards Airbus," he said, though "It won't happen overnight".
Al Jazeera
22-04-2025
- Business
- Al Jazeera
GE Aerospace CEO calls for tariff-free trade in the aviation sector
GE Aerospace CEO Larry Culp has advocated re-establishing a tariff-free regime for the aerospace industry under the 1979 Agreement on Trade in Civil Aircraft during a meeting with United States President Donald Trump. On Tuesday, in an interview with the news agency Reuters, Culp said the company's position was 'understood' by the administration, adding that the zero-duty regime has helped the US aerospace industry to enjoy a $75bn 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-19 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 the company's 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 with 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 $500m this year. The company is making greater use of foreign trade zones and available trade programmes like duty drawbacks to mitigate the impact. It is also employing cost controls and a tariff surcharge to protect its margins. Culp's comments come amid pressure on another aerospace giant in recent days. Last week, China asked airlines based there to cancel aircraft orders for planes made by US company Boeing amid the looming trade war. Trade-induced economic uncertainty has taken a toll on travel demand as well. With travel spending softening, there is a growing risk that 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.
Yahoo
07-04-2025
- Business
- Yahoo
Trump's tariff defense under WTO rules could face legal challenges
-- The Trump administration's decision to impose tariffs on civil aircraft parts may face legal challenges under international trade rules, according to Bank of America (NYSE:BAC) (BofA) analysts. At the center of the issue is whether the U.S. tariffs override obligations under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft (ATCA), which has mandated the elimination of tariffs on civil aircraft and related components since 1980. The U.S. could seek cover under Article XXI of the General Agreement on Tariffs and Trade, which allows exemptions from WTO commitments on grounds of 'essential' security interests. While the WTO has historically interpreted 'essential' to mean a state of war, the U.S. has long argued that the term is 'self-determining,' giving each country discretion in defining its national security. However, the legal foundation for the tariffs remains uncertain. The Trump administration invoked the International Emergency Economic Powers Act (IEEPA) as a justification, but BofA analysts highlight that 'IEEPA isn't a tariff legal authority,' and that 'many in the legal community think these tariffs could fail when litigated in court.' The aerospace industry is already feeling the impact of the recent trade tariffs. Howmet Aerospace (NYSE:HWM_p), a key player in the sector, has issued a force majeure notice to its customers, a legal clause that permits contract obligations to be suspended when unforeseen and uncontrollable events occur. The company said it would work with customers, 'including discussing your interest in alleviating the impact of the Tariff Executive Order on Howmet.' This marks the first instance of a commercial aerospace supplier taking such action since the introduction of the tariffs. 'We would expect other suppliers to follow as Howmet is widely respected as a disciplined and well-run supplier,' BofA analysts said. Suppliers may find themselves compelled to negotiate pricing concessions with customers to manage the financial burden of the increased costs due to the tariffs. Related articles TPG Reports Third Quarter 2024 Results Palantir earnings beat by $0.01, revenue topped estimates Diamondback earnings missed by $0.64, revenue topped estimates
