The Next Round of Tariffs May Exclude Aviation

February 23, 2026 by Leave a comment

Mere hours passed between the Supreme Court ruling that the IEEPA Chapter 99 tariffs were illegal, and the President issuing executive orders establishing the next set of tariff paradigms.

The White House issued an executive order calling for the establishment of new tariffs under Section 122 of the Trade Act of 1974 (19 U.S.C. 2132). The order demands that the government establish new tariffs setting a 10% duty rate on all foreign goods imported into the United States, starting tomorrow (February 24, 2026). The HTSUS code associated with this new tariff is expected to be 9903.03.01.

There is good news for industry: many aviation parts will be exempt from this new tariff. The exemption will apply to a list of HTSUS tariff codes that are typically associated with aircraft, engines, and their parts. The list is nearly 600 codes long, so it encompasses a significant number of aircraft parts classifications. Always check your HTSUS codes against this list for each import, to assess whether the additional duty applies to your import. The tariff provision that exempts aircraft parts from the new section 122 duty rate is expected to be 9903.03.05.

Section 122 permits the President to use tariffs to deal with large and serious United States balance-of-payments deficits. The United States has the world’s largest negative balance of payments; however, this provision only permits tariffs of up to 15% for up to 150 days. After that the tariffs can only be extended by an act of Congress.

Please note: this blog article is based on the Administration’s executive order. Tariff rules can be (and have been) changed between the executive order that announces them and the formal publication in the Federal Register. So please don’t make any legal moves until you have reviewed the final published language.

UPDATE: the 10% tariff has been established as predicted, and when into effect this morning (Feb 24, 2026).

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New White House Policy on Anti-Competitive Behavior Could Affect Aviation

July 9, 2021 by Leave a comment

The President is expected to sign a new Executive Order on competition, today. Although the Order is not yet available,the Administration has already released a Fact Sheet about the planned Executive Order. The title of the new Executive Order is expected to be “Executive Order on Promoting Competition in the American Economy.”

The official purpose of this Executive Order is to promote competition. The Administration says it is taking aim at large companies that adversely impact competition. But every new policy has the potential for unintended consequences, so we will be carefully watching this Executive Order and the regulations that are generated to implement it.

Here are some highlights from the Fact Sheet of items that could potentially affect aviation businesses:

  • The Executive Order encourages DOT to issue rules requiring that air carriers offer certain ancillary fee refunds to consumers.
  • The Executive Order encourages DOT to issue rules requiring greater clarity and disclosure of ancillary fees (including baggage, change, and cancellation fees).
  • The Executive Order encourages the FTC to ban or limit non-compete clauses that affect the labor market. Such clauses are fairly normal for employees who have access to economically-sensitive confidential information in our industry. A ban on such clauses could affect existing relationships and cause companies to pursue other strategies for protecting sensitive data.
  • The Executive Order encourages the FTC and DOJ to prevent employers from sharing wage and benefit information with one another.
  • The Executive Order encourages the FTC to establish rules on surveillance and the accumulation of data. This is meant to apply to “Big-Tech” but it could easily spill-over into obligations on anyone who collects data and uses the internet (i.e. everyone).
  • The Executive Order encourages the FTC to issue rules against restrictions on using independent repair shops. This is meant to apply to cell phones, but this could set a precedent that applies to aviation repair.
  • The Executive Order calls for passage of the “Protecting the Right to Organize Act.” This Act would expand the reach of the Fair Labor Standards Act, would permit secondary strikes (under which a union can strike in support of someone else’s rights, even when it does not have a direct interest in the issue), and expanding whistleblower protection.
  • The Executive Order describes an Administration policy of greater scrutiny of mergers, including acquisition of small companies. This is meant to apply to internet service companies but it could easily be applied to other industries (including aviation).

It often takes several days after an Executive Order is announced for it to be published in the Federal Register. We will be watching carefully for this one, as well as watching the regulations and policies that are generated in its wake.

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The New UK: What Does Brexit mean for Aviation?

December 2, 2020 by 1 Comment

Part One: Brexit’s Legal Landscape Affecting Aviation

Everyone knows that the UK left the EU earlier this year, and that the UK and EU have been in the Withdrawal transition period since January 31. The Withdrawal period is governed by the Withdrawal Agreement signed by the UK and the EU last year. The last day of the current transition period is scheduled to be December 31, 2020. Part of the rationale behind the nearly-one-year-long transition period was to permit the UK and EU to negotiate a trade agreement that would reflect their long-term relationship.

There is little time for the UK and EU to complete negotiations. The negotiation were already very difficult due to the differing opinion on political issues like the Irish border; those negotiations have been hampered as each deals with the issues surrounding Covid-19. Trade deal negotiations restarted this past weekend, but it may be too little, too late. It is looking like there may not be an agreement by December 31 – most particularly not an agreement that permits the UK CAA to remain as a part of EASA.

So what does this mean for the aircraft parts market? First let’s examine some of the general agreements and basic principals that are likely to affect aircraft parts transactions (in the next article, we will examine some more specific scenarios and rules).

Generally speaking, a nation remains responsible for the airworthiness of the aircraft on its national registry. This means that an aircraft on the German registry can be maintained under the EU (EASA) regulations, and the rules about what parts can be installed on that aircraft are gong to be the EU rules. The EU has entered into agreements with other authorities to share certain oversight duties; for example, new parts produced under US FAA certificates/approvals are typically legal to install on EU aircraft when they meet the terms of the agreements between the EU and the US. But the EU does not have a comparable agreement with Mexico, so an aircraft parts produced under production approval issued by the Mexican DGAC would not be directly accepted into the EU system (note that EASA has a working arrangement that permits Mexico to validate and/or accept certain EASA certificates and approvals).

Through the EU (Withdrawal) Act 2018, all European Union aviation laws were adopted into UK law upon Brexit (deferred to the end of the transition period).  This means that the same EASA regulations under which the UK has been operating will continue to apply to UK transactions, but new EU regulations will no longer apply directly to the UK after the end of the transition period.

Because the UK is withdrawing completely from the EASA system as of January 1, 2021, the UK CAA will undertake all of the aviation safety regulatory functions. UK CAA has been preparing for this for years, and they appear to be ready.

The UK will no longer be included in EU-level Bilateral Aviation Safety Agreements. New UK agreements have already been negotiated and will come into effect on January 1, 2021. These agreements will be substantially the same as the correlative agreements between the ‘third-country’ and the EU. These include agreements with the following ‘third countries:’

Until and unless something changes in the EU law or in the negotiations between UK and EU, there appears to be no agreement between the EU and the UK for aviation approvals and certificates.

The EU promulgated a regulation (Regulation (EU) 2019/494 (25 March 2019)) that permitted recognition of certain documents, like copies of Form 1, during a continuing transition period; however that recognition did not come into effect because Article 10(3) explains that the regulation will not come into effect if a withdrawal agreement is signed before Brexit. Such a Withdrawal Agreement entered into force in 2019. This means that the primary EU legal authority permitting acceptance of approvals issued in the UK before January 1, 2021 did not come into effect. This does not mean that the EU cannot accept any new or maintained aircraft parts from the UK – there is an important exception that may apply from Article 41 of the Withdrawal Agreement – and we will address this important exception in our next blog article.

In the next blog post, we will look more specifically about how all of this affects aircraft parts transactions.

#aviation #brexit

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Brexit Update – September 3, 2019

September 3, 2019 by Leave a comment

UK politics are getting more interesting.  As we predicted a month ago, the UK Parliament will be prorogued next week.  This means that the current Parliamentary session (which is already the longest in history) will end and a new session will be started five weeks later.  The five week period includes a three week scheduled recess, so it really only eliminates two work weeks; but it also terminates all legislative proposals that remain incomplete at the end of the session (Americans will be familiar with the corollary in Congress, and they will likewise be familiar with the notion that unfinished bills simply get reintroduced in the next session).

With just days left in the current Parliament, Labor leaders have announced plans to take steps to prevent a “no-deal” Brexit, and several prominent conservatives appear ready to support that effort.  This could spell the end for Prime Minister Boris Johnson’s government – potentially leading to snap elections in the middle of the Brexit uncertainty (although the Labour Party has said that it would not vote for a snap election if that would help Johnson deliver a no-deal Brexit.).  If elections happen, Johnson could win a majority, strengthening his negotiating position and supporting his “do or die” pledge to leave the EU; or the “stay” contingent could win a majority which might result in a further delay of Brexit pending further negotiations, or even a revocation of the Article 50 declaration (which would keep the UK in the EU).  It is equally possible that snap elections (if they happen at all) could lead to a new parliament with the same problem: a slim majority that favors leaving the EU, but another majority that rejects a “no-deal” exit.  This is all part of a triangular political battle pitching Boris Johnson and “leave” proponents on one side, British Liberals and other “stay” proponents on another, and the EU on a third side.  And right in the middle of the triangle are the people of the UK – waiting to see how it will all lay out.  But outside the triangle is another constituency waiting to see the results: the rest of the word (including the global aviation community).

Things are heating up and the next week could see some dramatic action in UK politics.

While the pace of the news about Brexit seems to be getting more frenetic, the scenarios for aviation remain largely unchanged.  Our latest guidance and recommendations concerning aircraft parts inventories and transactions continue to be valid, and readers should refers back to the August 8 article for tips and guidance.

The most important thing to know is that the UK CAA, and the other global aviation authorities, have seen this coming for a long time.  Preparations have been made for a both “deal” and “no-deal” scenarios.  We fully expect issues, because change always creates unforeseen issues, but we also expect that aviation business – on a grand scale – will go on.

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FAA Confirms that Manufacturing DARs May Continue to Issue 8130-3 Tags

June 11, 2012 by Leave a comment

Today, the FAA released a memo that confirms that Manufacturing DARs continue to have the authority to issue 8130-3 tags (the memo was dated May 31).  This has been a source of concern for many DARs and the distributors that rely on them.  The memo corrects the concern.  The speed with which the FAA corrected this issue shows that FAA headquarters is listening to our industry’s concerns and is supporting the industry’s safety needs.

Earlier this year, ASA made the FAA aware of an issue concerning the recent changes to FAA Order 8100.8 (the “D” revision).  There was an unanticipated omission of the language that authorized Manufacturing DARs to issue 8130-3 tags for demonstrably airworthy components held by distributors.  The new language limited Manufacturing DARs to only working for production approval holders.

ASA asked for a deviation memo to confirm that this change was an inadvertent error.

The new (erroneous) language created a disconnect in the regulations – there was a privilege that persons enjoy under the regulations (obtaining 8130-3 tags when authorized) that would not be supported by the FAA in certain places if Manufacturing DARs were precluded from issuing 8130-3 tags for demonstrably airworthy parts.

14 C.F.R. § 21.327 permits “any person” to apply for an airworthiness approval.  Failure to correct the new language in 8100.8D would mean that Manufacturing DARs are precluded from supporting the “any person” language of 21.327.  FAA operational norms preclude FAA employees from being available to issue airworthiness approvals for parts in most cases.  Thus, a failure to correct this language would mean that in locations that previously relied on Manufacturing DARs to issue 8130-3 tags, the FAA would be unable to meet its 21.327 obligations unless it allocated resources in FAA offices to being able to issue airworthiness approvals to applicants.

ASA argued that it is in the FAA’s and industry’s best interests to extend the practice of permitting Manufacturing DARs to issue 8130-3 tags for demonstrably airworthy parts held in a distributor’s inventory.

ASA also pointed out the historical context of the privilege.  Over the past decade, the FAA has established policies that permit Manufacturing DARs and Maintenance DARs to examine a part and its documentation, and where a finding of airworthiness can be made based on this examination, to issue an 8130-3 tag to document that finding.

Originally, these DAR functions were performed under function code 8 for Manufacturing DARs and function code 23 for Maintenance DARs.[1]  Although Manufacturing DAR functions are normally limited to PAH facilities, the FAA made a special exception that permitted Manufacturing DARs to issue 8130-3 tags for aircraft parts at independent distributor  facilities (NOT at the PAH facility).  When this privilege was first issued, the FAA highlighted the fact that this was an exception to the normal rule (under which Manufacturing DARs usually work exclusively at PAH facilities).[2]

Later, the FAA recognized that the function of issuing domestic 8130-3 tags and the function of issuing export 8130-3 tags required the same skills and the FAA merged the authority for DARs to issue both domestic and export 8130-3 tags under  one function code for each type of DAR.  This lead to both forms of 8130-3 tags being issued under function code 20 for Manufacturing DARs and function code 32 for Maintenance DARs (these function codes had previously been limited only to export tag privileges).

The new memo returns the industry to the course that the FAA had charted.  It explains that the change in Order 8100.8 was inadvertent and that there was not an intent to preclude distributors.  It explicitly permits Manufacturing DARs to exercise their 8130-3 issuance privileges for any applicant, including a distributor.  The new deviation memo will soon be available on the ASA website.

[1] See, e.g., Procedures for Completion and Use of the AUthorized Release Certificate, FAA Form 8130-3, Airworthiness Approval Tag, FAA Notice 8130.70 (June 15, 2001) (permitting the issuance of 8130- 3 tags for airworthy parts located at independent distributor facilities).

[2] Id. at ¶ 5(b) NOTE (stating that “in order to ensure adequate DAR resources to support the activities authorized under this notice, these domestic airworthiness approvals may be issued by either manufacturing or maintenance DARs”).

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FAA Releases Repair Station Rules

May 21, 2012 by 1 Comment

Today, the FAA issued a significant new proposed rule for repair stations.

The proposed rule would change the ratings system for repair stations. The following table comes from the new proposed rule, and it illustrates the proposed way that the ratings system is expected to changed.

Current Proposed
Airframe Class:

1. Composite Small

2. Composite Large

3. All-Metal Small

4. All-Metal Large

 

 Airframe Category:

1. Aircraft certificated under part 23 or 27.

2. Aircraft certificated under part 25 or 29.

3. All other aircraft.
Powerplant Class:

1. Reciprocating Engines of 400 HP or less.

2. Reciprocating Engines of more than 400 HP

3. Turbine Engines.

 Powerplant Category:

1. Reciprocating engines.

2. Turbine engines.

3. Auxiliary Power Units.

4. All other powerplants.

 
Propeller Class:

1. All Fixed and Ground-Adjustable

2. All other propellers.

 

 Propeller Category:

1. Fixed-pitch and ground-adjustable propellers.

2. Variable-pitch propellers.

3. All other propellers.

 
Radio Class:

1. Communication.

2. Navigation.

3. Radar.

 

 Component.
Instrument Class:

1. Mechanical.

2. Electrical.

3. Gyroscopic.

4. Electronic.

 

 Component.
Accessory Class:.

1. Mechanical.

2. Electrical.

3. Electronic.

 

 Component
Limited Rating Specialized Service.

 

 Specialized Service.
Limited Ratings (§ 145.61(b) lists 12 possible limited ratings). Eliminated.

 

The most significant difference is that FAA is proposing a new “Component” rating that would replace the Radio, Instrument, and Accessory ratings.

The proposed “Component” rating would allow repair stations to work components that are not installed on an airframe, powerplant, or propeller (bench work).  A repair station with a Component rating would be required to have an Airframe, Powerplant, or Propeller rating to install components or appliances. The FAA expects that such a product-level rating would be limited to only installation and removal.

The preamble to the rule states that the FAA expects that Component-rated repair stations would have a list of their components in their operations specifications.  In light of the difficulty now faced by some repair stations in amending their operations specifications, keeping the component list in the op specs would likely make it very difficult for a component repair station to add new components to their list of permissible components, which in turn would probably cause many smaller component shops to stagnate as new products come out but the operations specification amendment process limited their ability to add them as capabilities.

The FAA will accept public comments on the proposed rule through August 20, 2012.  Comments should reference FAA Docket Number “FAA–2006–26408.”

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Atlas Air Cancels Part of their 747-8 Order

September 22, 2011 by Leave a comment

Atlas Air has chosen to cancel part of their 747-8 order, by exercising their termination rights.  This cuts their order from 12 to 9.  Atlas expressed their intent to receive three of these aircraft in October and November, and said that they remain committed to the 747-8.

The Atlas 8-K that was filed yesterday (September 21) with the Securities and Exchange Commission explains:

On September 16, 2011, Atlas Air, Inc. (“Atlas”), a wholly-owned subsidiary of Atlas Air Worldwide Holdings, Inc. (“AAWW”), notified The Boeing Company (“Boeing”) of its decision to exercise its right under Purchase Agreement No. 3134, dated as of September 8, 2006, between Atlas and Boeing (the “Agreement”) to terminate such Agreement with respect to the first three 747-8F aircraft scheduled to be delivered to Atlas under the Agreement. Atlas terminated the Agreement with respect to these three aircraft due to lengthy delays in delivery of the aircraft and performance considerations. Nine 747-8F aircraft remain on order under the Agreement, as well as one option and 13 purchase rights.

Just a week ago, on September 16th, Cargolux Airlines decided to to delay taking its first two 747-8s.  They are supposed to be Boeing’s launch customer for the aircraft.  Reports suggest that Cargolux still intends to accept the aircraft.

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Boeing’s Environmental Initiatives

July 20, 2011 by Leave a comment

On July 19, Boeing’s Vice President of Environmental, Health and Safety, Mary Armstrong, was a keynote speaker at the 2011 ASA/AFRA Conference.

Armstrong spoke at a joint session of the memberships of both the Aviation Suppliers Association (ASA) and the Aircraft Fleet Recycling Association (AFRA).  Her speech made it clear that Boeing is acting as a leader in aviation’s efforts to  achieve better environmental performance.

Boeing has been taking steps to reduce energy use, and to reduce the production of hazardous materials.  This has lead to significant measurable reductions in both areas at Boeing.  Boeing is now working on reducing the waste-to-landfill to zero.  They have already achieved this at four locations (Huntsville, Philadelphia, Salt Lake City and South Carolina.  In South Carolina, the Boeing facility has gone to 100% renewable energy, including a ten acre solar roof and using biomass for remaining energy needs.

She discussed Boeing and AFRA’s efforts at lifecycle environmental footprint reduction.  The aerospace industry has taken a cradle-to-grave approach, trying to minimize environmental footprint throughout the aircraft’s lifecycle.

Armstrong explained that for Boeing, environmental performance starts with design.  Boeing is focused on increasing the use of recycled materials in products and in tooling.  They are designing their Aerospace products to reduce or eliminate the use of hazardous materials and the generation of hazardous wastes.

They are switching to non-chromated paints and primers for their aircraft.  This is a significant change from traditional coatings that used chrome, which is a hazardous material.

Boeing is participating in a new group known as the International Aerospace Environmental Group.  This group is made of aerospace manufacturers working together to share best practices that will permit them to achieve better environmental performance.  One of their goals is to create a consistent process for suppliers to list their chemical bill of materials.  This will provide the framework against which the manufacturers can reduce their adverse environmental impact.

Armstrong explained that aviation produces about 2% of the global carbon emissions, if you take into account all of the aviation-related sources.  Therefore the industry feels compelled to focus on control and limitation of carbon growth.  The 787 and 747-8 aircraft will both be cleaner and quieter.  The 787 is designed to reduce carbon emissions by 20% and the 747-8 should reduce carbon emissions by 16%.

Boeing is testing biofuels in an effort to identify sustainable biofuels.  By sustainable, they mean crops that will not compete for water or land with food crops.  They have been engaged in test flights since 2008, and are identifying fuels that will work as well as or even better than pure Jet-A.  They are working to develop 50/50 blends and the standards for this have been recently approved by ASTM.

Boeing is also working with the FAA on the development of modern air traffic management systems.  Implementation of improvements in this area could cut 12% or more off of aviation’s carbon emission total.

Boeing wants to be an environmental leader, so the next step, which Boeing and AFRA are both taking together, is to undertake a cradle-to-cradle approach.  This means thinking about where the recycled materials from an aircraft will go, and undertaking strategies that will permit the aviation industry to recover recycled aerospace materials for use within the industry.

Boeing is working with AFRA and ASA to develop better strategies for reclaiming materials.

Armstrong praised AFRAs BMP efforts.  She explained that she expects the draft Recycling BMP to lead to an effective mechanism for improving effectiveness and efficiency in recycling of aircraft materials.

Between 2010 and 2030, the aviation industry is expected to add 33,500 new airplanes and half of these will replace existing aircraft.  In the next ten years, the industry expects a significant number of aircraft retirements, all over the world.  These older aircraft will yield to more economical and environmental aircraft, but their retirements create a recycling challenge.

Boeing is engaged in a number of pilot projects for environmental improvement.  These projects include:

  • Recycling carbon fiber, for interior components, for non-structural applications and for tooling
  • Recycling interior materials, like aircraft carpet to reduce landfill materials

Boeing is working on technologies that will permit creation of carpet tiles from recycled carpet.  There is a pilot project for testing these carpet tiles with Southwest Airlines right now.

Boeing is asking its supply base partners to adopt environmental management systems similar to ISO 14001 (although they need not be registered to ISO 14001).  Boeing expects to address environmental responsibility, in the future, as an element to consider for awarding contracts to partners.

One thing that Armstrong did not mention in her speech is that Boeing is one of the founding members of AFRA, and AFRA’s goals include a variety of environmental and recycling efforts.  Through AFRA Boeing has achieved some significant advances by publishing Best Management Practices related to aircraft materials recycling.

Boeing is expanding its understanding and expanding its collaborations in order to create new value for customers and for the environment.

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Senator Inhofe Introduces a “Pilot’s Bill of Rights”

July 14, 2011 by Leave a comment

The FAA civil penalty and certificate action scheme can be both complicated and bizarre to the uninitiated.  What do you think might happen if a member of Congress had to negotiate the FAA or NTSB rules of practice?

Well, recently Senator Inhofe was accused by the FAA of pilot error when he allegedly landed his aircraft on a closed runway last year.  He navigated through the system and retained his pilot’s license.

But his encounter with administrative law has clearly left its mark on him.  Senator Inhofe has introduced new proposed legislation, S. 1335, that would provide a “Pilot’s Bill of Rights.”  Under the proposal, airmen accused of offenses would get some additional rights,

  • pilots would be entitled to relevant air traffic information (many attorneys have complained that exculpatory information is routinely erased);
  • the right to appeal matters to the Federal District Courts (and not just the FAA/NTSB system);
  • on appeal, the court would grant deference to FAA legal interpretations but would not be bound by them (NTSB is bound by FAA interpretations of law, no matter how contradictory they may be);
  • in an emergency case, the reviewing court would have the power to provide independent review of the emergency decision

This Bill of Rights could be useful to pilots and mechanics accused of FAA violations.  It could also be improved a bit.  For example, independent review of emergency decisions is not the problem.  The problem is that the review of emergency actions is only permitted to be based on the allegations of the FAA.  The FAA attorneys are pretty smart – smart enough to know that if they allege fraud then they can justify an emergency hearing – even if the items of proof don’t really support an allegation of fraud.  Thus, a true reform would permit an evidentiary hearing on the emergency charge (like a hearing for a preliminary injunction) and would impose the burden of proof on the FAA.

And in a perfect world, the rights should also be extended to anyone else facing a FAA/NTSB hearing.

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