Duty-Free Treatment for Civil Aviation Products of Japan: May Be Returning

September 4, 2025 by Leave a comment

Today the White House issued an executive order describing the new tariff agreement with Japan.

The new executive order establishes a baseline 15% tariff on goods of Japan. But it appears that aircraft parts produced in Japan may be authorized for duty-free entry into the United States.

The new executive order appears to recognize the Agreement in Trade on Civil Aircraft (“ATCA”) as providing for duty-free treatment of civil aviation products from Japan. The language is complicated because it directs that “the tariffs imposed through the following Presidential actions and subsequent amendments to those actions shall no longer apply.” The clause lists four Presidential actions. The problem is that the new executive order is not described as a specific amendment to those four Presidential actions, although it cross-references them. This leaves the administration some room to decide that the ATCA doesn’t really exempt aircraft parts from the 15% duty on goods of Japan.

But it appears that the current intent of the Administration is to recognize the ATCA duty-free treatment of civil aircraft parts that are the product of Japan. If this is implemented as we expect, then Japan will join the United Kingdom as only the second jurisdiction in which the ATCA is allowed to once-again provide duty-free treatment to civil aircraft parts, overcoming the Chapter 99 tariffs. It will take a few days for this to get implemented in the HTSUS, and when it is then the implementation will clarify the impact on aircraft parts.

In addition, the White House executive order announced a $550 billion investment in the United States by Japan. The Japan Times reported that 1-2% of this will be direct investment and the remainder will be provided in the form of loans and loan guarantees in the United States.

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Federal Circuit Confirms “Trump Tariffs” Are Illegal; But the Fight Continues

August 29, 2025 by Leave a comment

Today, the Federal Circuit court of Appeals issued an opinion that held that the executive orders that established tariffs under the IEEPA (“Trafficking” and “Reciprocal” tariffs) exceeded the authority delegated to the President by Congress. The court held that the executive orders were “invalid as contrary to law.”

The case rules on some of the new tariffs that the Administration has issued this year under Chapter 99 of the HTSUS. This ruling does NOT apply to ALL of the new tariffs.

This fight isn’t over. The Administration will likely appeal to the Supreme Court. In addition to that likely step, the Federal Circuit also sent the case back to the Court of International Trade to examine one issue.

The Court of International Trade had issued a nationwide injunction against the enforcement of the executive orders on the ground that they were illegal (decided May 28, 2025). Just one month later, the concept of nationwide injunctions against the United States government was the subject of a Supreme Court ruling in Trump v. CASA (decided June 27, 2025). That case held that “universal injunctions likely exceed the equitable authority that Congress has given to federal courts.” The Supreme Court limited the injunctions only to the benefit of the plaintiffs.

The CASA decision seemed short-sighted at the time, because it means that if the government is doing something illegal, the courts can only prevent the illegal action against the plaintiffs, and not against the rest of the United States, thus forcing plaintiffs to certify a class (which can be difficult) in order to secure broad relief for all affected parties who might be affected by the acknowledgedly illegal government action. It essentially allows the government to continue breaking the law even after the courts have ruled that the government action is illegal.

The Court of International Trade now has to look at how it wants to approach a remedy to the illegal executive orders on tariffs. If it is limited to only an injunction for the benefit of the direct litigants, then that could open a flood gate of litigation if the Administration continues to charge import duties that have been ruled illegal.

The next decision of the Court of International Trade will be very important to the aviation suppliers’ community, because it could open the door to potential duty protests, in which ASA members may have an opportunity to petition for recovery of duties paid over the past few months. But this depends on the Court of International Trade being able to craft a remedy that extends to non-parties.

Under the Constitution, the judicial power of the Supreme Court extends “to Controversies to which the United States shall be a Party,” and the Supreme Court’s power may be delegated to inferior courts in the Federal system. The basis of the CASA ruling was that Congress had not delegated to the federal courts the power to issue injunctions, but this seems to have ignored the inherent Constitutional power of the federal courts when the United States is a party. This may provide the Court of International Trade with an approach that allows it to issue a final ruling that protects all U.S. importers.

This may be merely the first verse of an epic. The Administration initiated a 232 investigation that could lead to new tariffs on aircraft and aircraft parts, so we could be looking at new tariffs in the near future even if the Court of International Trade finds a way to quash the executive orders.

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Spirit Airlines Files for Bankruptcy Protection

August 29, 2025 by Leave a comment

Spirit Airlines has filed for Chapter 11 bankruptcy protection. Chapter 11 means that they are seeking a reorganization (another one – remember that they just came out of chapter 11 earlier this year).

Spirit said it intends to conduct business as normal during the restructuring process, meaning that they will continue to need aircraft parts.

Spirit has published guidance on its restructuring plans. Part of that published plan involves “optimizing” the fleet which likely means that they plan to use bankruptcy to terminate some leases. Spirit will be sending out a Vendor Letter in which they confirm their plan to pay vendors in the normal course of business for goods and services delivered to Spirit on or after August 29, 2025 (today – this is the “post-petition” period). Any outstanding invoices for goods and services delivered prior to our Chapter 11 filing date are considered “pre-petition” claims and will need to be addressed as part of the Chapter 11 process.

It is not unusual to see a bankruptcy trustee seek to recover sums paid in the period immediately before the petition. If you get a letter like this, then please consult with an attorney before you agree to return money to the trustee. In my experience, there can be defenses to such trustee claims.

Those who are owed significant unpaid sums from Spirit should work with bankruptcy counsel to investigate options. Your attorney may be able to negotiate more favorable treatment if you have an ongoing relationship with Spirit, especially if they need your support to continue flying.

For ideas about how to protect your company from a customer’s bankruptcy, please look at some of our older blog posts on the subject:

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Late Friday Changes to the Tariff Rules – Still No Love for EU Aircraft Parts

August 29, 2025 by Leave a comment

To round out our week, this afternoon the government has issued new tariff rules. Spoiler alert – it extends certain exemptions for products of China, but it does nothing useful for aircraft parts.

Welcome to the world, revision 21 of the 2025 HTSUS!

I’ve been watching the HTSUS carefully because I am expecting to see a change excluding EU aircraft parts from the ‘product-of-the-EU’ tariffs in Chapter 99. That change has not yet been issued. The change was foreshadowed in a White House Statement that was issued a week ago (see our blog post from 8/22). But the 15% duty rate is still (currently) applied to aircraft parts that are products of the EU.

So what did we see in revision 21? Minor changes to the way that we process products of China. The China exceptions for certain goods (covered under HTSUS 9903.88.69 and 9903.88.70, and their cross-referenced subchapter III notes) are extended through November 29, 2025. These are a variety of specific goods that have been excluded from tariffs by order of the U.S. Trade Representative. The list includes certain LCD modules and main board assemblies. Most aircraft parts fall outside of this list of exempted products from China.

Keep your eyes out for 2025 HTSUS revision 22 – if that is issued next week then it might change the treatment of civil aircraft parts that are the product of the European Union.

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More Changes: Permitting More Aircraft Parts to be Exported to Syria

August 28, 2025 by Leave a comment

Earlier this week we reported that the government was reducing the OFAC sanctions on Syria. At that time, we warned that the BIS sanctions programs remained in place.

The government is expected to reduce the BIS sanctions against Syria next week (probably Tuesday). This is expected to include an expansion of the license exceptions that are available for shipping goods to Syria. The license exception changes are expected to include an expansion of AVS (which is currently not applicable to Syria) that will allow AVS to be used for EAR99 goods and for goods only restricted under anti-terrorism restrictions (which will include aircraft parts controlled under ECCN 9A991.d, but will exclude things like IRUs).

The RPL license exception is also expected to become available for certain transactions with Syria (e.g. for repairing aircraft or their parts for Syrian airlines), provided that such exports will not support the Syrian police, military, or intelligence sensitive end users or uses.

There will still be restrictions on exports to Syria, so be sure to check compliance requirements carefully.

These changes are expected to be immediately effective upon publication.

UPDATE: The new rule was published September 2 and was consistent with our predictions

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Syrian Sanctions Are Being Lifted; Exporters Still Need to Carefully Review Their Proposed Transactions

August 25, 2025 by Leave a comment

The Office of Foreign Asset Control (OFAC) plans to publish a notice rescinding Syrian sanctions in tomorrow’s Federal Register. The notice is expected to be immediately effective, upon publication.

The United States is in the process of lifting sanctions against Syria pursuant to the President’s Executive Order that was issued earlier this summer.

This does not mean that all sanctions against Syria are lifted! For example, the BIS sanctions regime still currently exists. Proposed exports to Syria still need to be carefully reviewed to ensure compliance, and may still require an export license. But this is one important step to making it easier to export aircraft parts (and other goods) to Syria.

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White House Announces Tariff Rates on EU Aircraft Parts

August 22, 2025 by Leave a comment

Last night the White House issued a statement explaining the current status of the framework trade agreement between the European Union and the United States.

The framework trade agreement anticipates that aircraft and aircraft parts that are products of the EU will enjoy the “most-favored nation” (“MFN”) rates of duty. MFN status means that the country enjoys the “column one” duty rates (it does not mean that they get better rates, even if another country has a preferable rate under a separate agreement). This appears to imply that the additional chapter 99 tariffs will no longer apply to aircraft parts that are products of the EU, and we would go back to the pre-2025 tariff treatment for civil aircraft products of the EU.

There is a strong likelihood that aircraft parts that were not subject to duty-free treatment before 2025 (like certain fasteners used in aircraft) could remain subject to the additional chapter 99 tariffs (which are scheduled to remain at 15% for most products of the EU).

The statement explaining the framework trade agreement suggests that the new rates (including the new rate on aircraft parts) will go into effect on September 1.

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New Guidance on Tariffs for Aircraft Parts (Aug. 6, 2025)

August 6, 2025 by Leave a comment

Tariffs continue to be a moving target. Today’s Federal Register includes some new tariff changes that affect aircraft parts imports (some of these new provisions are not yet listed in revision 17 to the HTSUS).

A quick look at some major jurisdictions that produce civil aircraft parts shows the variety of approaches currently being used to assign tariff value to aircraft parts being imported into the United States:

Source (“product of”)Duty and Tariff Code
Aircraft parts that are products of Brazil (e.g. many Embraer parts):Base duty plus 10% additional duty (9903.02.09)(but NOT the additional 40% (9903.01.82)) for aircraft parts)
Aircraft parts that are the products of Canada (e.g. many Bombardier parts):If subject to USMCA – no additional duty (9903.01.14)
If NOT subject to USMCA  – base duty plus 35% (9903.01.10)
Aircraft parts that are products of the EU** (e.g. many Airbus parts):The higher of 15% (9903.02.20) or the normally-applicable base duty value if it exceeds 15% (9903.02.19)
Aircraft parts that are products of Japan (e.g. JAMCO parts):Base duty plus 15% (9903.02.30)
Aircraft parts that are products of the UK (e.g. many BAE Systems parts):No additional duty for aircraft parts (9903.96.01)

This table assumes an aircraft part that is subject to heading 8807 (where the base duty is 0%). In all cases, the civil aircraft-specific provisions are often limited to certain tariff codes, so please confirm the treatment of your actual import based on its tariff classification and actual country of origin. There may be additional codes and duties (or exceptions) that apply to your transaction based on the specific facts of your import.

These rates and applications are constantly changing, so be sure to verify information for the date of your entry into the U.S. Customs Zone!

** SPECIAL NOTE: The EU has reported that the United States has agreed to accept civil aviation products of the EU (including aircraft parts) with no additional duty; however this is not yet reflected in any Executive Order, Federal Register Notice, nor HTSUS provision. Stay tuned – we hope that this exception will be implemented into U.S. trade law, soon!

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Embraer Parts Appear to be Exempt from Latest Brazil Tariffs

July 30, 2025 by Leave a comment

Earlier today, the President issued an Executive Order imposing new sanctions on Brazil. The Executive Order imposes an additional 40% duty on goods of Brazil. This would be in addition to the existing 10% duty that already exists, for a total of a 50% duty on affected goods. Both of these are tariffs listed under Chapter 99 of the Harmonized Tariff Schedule, so they are called “chapter 99 tariffs.”

The good news for the aviation industry is that the Order appears to recognize the United States’ obligations under the Agreement on Trade in CIvil Aircraft, and it exempts civil aircraft parts under a wide array of tariff headings. In fact, the list includes things that are no always recognized as aircraft parts, like wires, tubes, and base metal parts [for purposes of the aviation exception, in all cases, only when the parts are intended for installation in civil aircraft]. As always, check your tariff code against the lust to be sure how your goods are treated, but the list of civil aircraft parts tariff codes that are not subject to this new Brazil tariff is a long one.

One particularly interesting element of the Executive Order is the way that it treats civil aviation maintenance performed in Brazil. When goods are exported for maintenance work overseas and the goods are then returned to the U.S., the work is typically tariffed on the invoice value of the work performed (under HTSUS 9802.00.50, for example). Many of the Chapter 99 tariffs have explicitly imposed their duties rates to maintenance performed in the subject country (for example, the tariff on goods of the EU also applies to the ‘added value’ associated with parts sent to the EU, repaired, and then returned to the United States [this is often the invoice value of the repairs]). But the additional 40% tariff does not apply to the value of maintenance of civil aircraft parts exported to Brazil for maintenance and then returned to the United States following that maintenance (at present, the earlier 10% tariff on goods of Brazil continues to apply to the added value of the repairs).

This is the second time we’ve seen this treatment for new chapter 99 tariffs – the UK tariff also has an exception for civil aircraft maintenance performed in the UK.

The Aviation Suppliers Association has filed documents with the Administration, asserting that application of many of the chapter 99 tariffs to civil aircraft parts violates both U.S. law and U.S> obligations under the Agreement on Trade in Civil Aircraft. Hopefully, the Administration is starting to recognize that aircraft parts need to be left out of the scope of the new chapter 99 tariffs.

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Tariff Update: UK Tariffs Provide a Positive Model for Treatment of Aircraft Parts

July 28, 2025 by Leave a comment

Tariffs continue to be a hot topic in the news, and for aviation businesses. Recent tariff decisions suggest that aviation may see some relief from tariffs in the near future.

The Japan and EU agreements have both been reported in the press, but neither is yet available to the public. The EU agreement is particularly important because it will likely affect tariffs applicable to Airbus parts that are imported into the United States. While the EU agreement is not yet available, the UK agreement may shed some light on what we can expect from the EU agreement.

The recent UK agreement has been reflected in revision 16 to the 2025 HTSUS, and this provides us with some idea about how aviation is likely to be treated in the new tariff agreements (but it is no guarantee that other arrangements will include the same language). Under the UK agreement, civil aircraft parts will enjoy duty-free treatment and will be excepted from the chapter 99 country-based tariffs (currently found in HTSUS 9903.01.25 for products of the United Kingdom). This agreement will be limited to aircraft parts that are the product of the UK, but we are hopeful that ASA’s efforts will lead to a more general duty-free approach for most aircraft parts.

ASA filed formal comments with the United States earlier this summer, in which we explained that tariffs on aviation were a bad policy idea, and they were also a violation of U.S. law and U.S. treaty obligations. That concept has been endorsed in the UK agreement, and we are hoping that it will be endorsed in other agreements as well.

Aircraft parts that are products of the United Kingdom and that are entered on or after June 30, 2025 may be entered under HTSUS Subheading 9903.96.01 (in addition to the base tariff that applies to the underlying goods). This subheading allows for duty-free treatment of civil aircraft and their parts:

9903.96.01: Effective with respect to entries on or after [June 30, 2025], articles of civil aircraft (all aircraft other than military aircraft); their engines, parts, and components; their other parts, components, and subassemblies; and ground flight simulators and their parts and components of the United Kingdom, classified in the subheadings enumerated in subdivision (a) of U.S. note 35 to this subchapter.

This clause specifically exempts aircraft parts from the additional duties imposed by HTSUS subheadings 9903.01.25, 9903.81.94, 9903.81.96, 9903.81.97, 9903.81.98, , 9903.85.12, 9903.85.13, 9903.85.14, and 9903.85.15. This means that both the UK country-based 10% tariff and the UK steel and aluminum derivative tariffs appear to be excluded for aircraft parts. This is a positive sign for the aviation industry.

There is a list of the HTSUS subheadings that are affected by this exception, so please make sure your base tariff code is within the scope of the aircraft parts exception (the list is found in Chapter 99: U.S. Note 35(a)). Note that while this list includes many tariff subheadings typically associated with aircraft parts, you should identify your specific tariff codes to make sure that they are included before assuming that the exception applies to your imports.

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