US Will Impose 10% Import Duty on European Planes and 25% Import Duty on Certain European Tooling

Earlier this year, the United States won a ruling in a trade case before the World Trade Organization.  The case was related to alleged subsidies of Airbus by the European Community.  The WTO ruling authorized the United States to impose duties on European imports; and a follow-on ruling dated October 2, 2019 authorized specific duty amounts.

The United States has published a list of products that will be subject to the additional duties. The list is subject to approval by the WTO but that approval is a mere formality.  Approval is expected within two weeks.

A copy of the US tariffs list (the “Final Products List”) associated with these punitive tariffs is currently available for information purposes only; however the final list will be published in the Federal Register.  This means that the currently-available list, although reasonably reliable, could possibly be changed.

The U.S. list proposes to impose a 10% duty on aircraft imported from France, Germany, Spain, or the United Kingdom.  This is limited to aircraft imported under headings

  • 8802.40.00.40 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, passenger transport
  • 8802.40.00.60 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, cargo transport
  • 8802.40.00.70 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, other (including passenger/cargo combinations)

At present, this list does not appear to include aircraft parts; however this could cause serious burden on US airlines and leasing companies that have already committed to accepting Airbus aircraft or other European aircraft.  If this inhibits the economic ability of companies to accept Airbus aircraft in the United States, then it is possible that the expected replacement of certain aircraft in the United States could be delayed.

The US also expects to impose a 25% duty on other named goods.  The press has made much of the high-profile categories, like wines and cheeses, but other categories are far more likely to impact the aviation community.  This includes:

  • German tooling and machinery under 8467.19.10.XX, 8467.19.50.XX, 8568.80.10.XX, 8568.90.10.XX
  • UK or German tooling and machinery under 8429.52.10.XX, 8429.52.50.XX, 8467.29.00.XX
  • German tools, as follows:
    • 8201.40.60-Axes, bill hooks and similar hewing tools (o/than machetes), and base metal parts thereof
    • 8203.20.20-Base metal tweezers
    • 8203.20.60-Pliers (including cutting pliers but not slip joint pliers), pincers and similar tools
    • 8203.30.00-Metal cutting shears and similar tools, and base metal parts thereof
    • 8203.40.60-Pipe cutters, bolt cutters, perforating punches and similar tools, (except for those with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium), and base metal parts thereof
    • 8205.40.00-Screwdrivers and base metal parts thereof
    • 8211.93.00-Knives having other than fixed blades
    • 8211.94.50-Base metal blades for knives having other than fixed blades
    • 8467.19.10-Tools for working in the hand, pneumatic, other than rotary type, suitable for metal working
    • 8467.19.50-Tools for working in the hand, pneumatic, other than rotary type, other than suitable for metal working
    • 8468.80.10-Machinery and apparatus, hand-directed or -controlled, used for soldering, brazing or welding, not gas-operated
    • 8468.90.10-Parts of hand-directed or -controlled machinery, apparatus and appliances used for soldering, brazing, welding or tempering

These tariffs are expected to be applied as of October 18.

Additive Manufacturing: A New Paradigm for Aircraft Parts?

Could the aircraft parts you sell be manufactured on a printer?  The latest aircraft parts manufacturing technologies that are being developed are using equipment very much like laser printer to build complete aircraft parts.  The research arm of EADS (the parent company to Airbus) has begun using futuristic additive manufacturing technology to make more cost-effective and fuel-efficient aircraft parts.

The most common form of additive manufacturing, also known as 3D printing, works by using software that splits three-dimensional designs into extremely thin layers. The printer then emits a thin layer of powder and, working from that software, uses a laser to harden the layers into the designed shape, stacking each layer on top of the previous one.

Additive manufacturing can reduce materials costs by emitting almost no wasted materials (as opposed to the unused trimmings left over from machining a part from a solid block) and it can also permit design adjustments based on software changes (permitting easy transfer from design-to-manufacturing).

The basic technology of additive manufacturing has been in use since the 1990s. Until recently, however, its utility was largely limited to building non-functional prototypes to test out designs that would ultimately be built using traditional manufacturing techniques. While the simplest form of 3D printing still relies on plastics to create non-functional models, printers are becoming capable of using more complex materials, including various metals, to produce useful products. Some researchers have even speculated that the printers will one day be able to use human tissue, enabling them to “print” organs and obviate the need for donors. Further advances are still necessary before the machines will be optimized to achieve the necessary consistency in output necessary for more widespread use.

A handful of companies, mostly in Europe and the United States, are currently producing and selling 3D printers, while others specialize in using these techniques to manufacture customized products for consumers. Though the technology is still prohibitively expensive for most purposes, costs have been decreasing, and there are currently “desktop” size printers on the market for $10,000. For large, industrial models, however, the price approaches $1 million. Because this technology is not yet considered “cost-effective” for any major manufacturing operation, many companies using printers to manufacture end-user products are subsidized by public funds.

The EADS facility in Filton, England, for example, represents a partnership with the Centre for Additive Layer Manufacturing (CALM) at the University of Exeter. That research group is funded by the European Regional Development Fund ERDF, the South West Regional Development Agency RDA, and the University of Exeter, in addition to EADS.

The joint venture has already yielded important scientific advances. The company has used software associated with additive manufacturing to streamline landing gear components into a design that might not have been possible with traditional methods. The resulting functional pieces, which can be made out of any metal powder, have reduced the weight of the original design by about half, by cutting out excess material that cannot reasonably be eliminated when using other manufacturing processes.

Airbus is currently experimenting with a few other types of small parts made through this process. The research team in Filton has already identified about 1,000 aircraft parts that could be made using additive manufacturing. Ultimately, Dan Johns, an EADS executive who runs the CALM project, hopes to bring the technology to a larger scale that will eventually enable companies to “print” full aircraft wings.

These lighter-weight components, once they are broadly incorporated, will save money not only on materials but also will save fuel costs for operators. By some estimates, reducing the weight of an aircraft by only one pound can save the airline over $50,000 in fuel over the course of the aircraft’s estimated 30-year life span. As a result. several companies, including Bentley, Boeing, Delphi, MTT, and Virgin Atlantic, are funding an additional research operation focused on implementing additive manufacturing at Loughborough University in England.

This technology also has the potential to permit manufacturers to better serve customer needs by making it possible to produce parts “on-demand” from a manufacturing software library.

Although the profitability for individual parts manufacturers to start buying 3D printers for production purposes is still in question, companies should pay close attention to developments as it becomes increasingly clear that additive manufacturing could play a role in the future of the aviation industry.