White House Suggests the Possibility of Tariffs or Other Restrictions for Aircraft Parts Imports

July 21, 2026 by Leave a comment

Aircraft parts imports have enjoyed duty-free status for many years.  That changed with last year’s IEEPA tariffs, which initially imposed their tariff burden on aircraft parts imports (but were ultimately found to violate the law and struck down).  These tariffs on aircraft parts violated the Agreement on Trade in Civil Aircraft (“ATCA”), which requires the duty-free entry of aircraft, engines, and their parts; so as the Administration’s tariff strategy became more sophisticated, new tariffs started to exclude aircraft parts from the new tariff burdens (consistent with America’s obligations under the ATCA).

In addition to prohibiting tariffs that would apply duties to aircraft parts imports, ATCA also prevents technical regulations that represent hidden restrictions on trade in civil aircraft parts.  This has allowed aircraft parts to move relatively freely in global commerce.

While ATCA may prohibit he imposition of import duties on aircraft parts, the Administration continues to see tariffs as an important foreign policy tool for the President. IEEPA does not permit a violation of the ATCA, but other laws might permit aircraft parts tariffs. With this in mind, the Administration opened a Section 232 investigation into the state of aviation, last year.  It was an open docket to which many aviation companies contributed, emphasizing the strengths created by globalization.  Industry comments explained that as U.S. commercial aviation manufacturing become more deeply integrated with the global aerospace supply chains, the industry found that cross-border collaboration helped to drive innovations and improvements in aviation safety, performance and efficiency. ASA’s comment to the section 232 docket can be found here. The ASA comments emphasized:

  • Current civil aviation import operations are largely separate from – and thus do not affect – the defense aircraft industry.
  • The United States should focus on retaining highly specialized production and manufacturing skills rather than focusing on foreign imports of parts for which there is concurrent domestic capability.
  • U.S. data shows a history of growth in exports of US manufactured aircraft and aircraft parts, and this doesn’t even include exports by U.S. based aircraft parts distributors; this growth suggests a growing positive balance of trade in the aviation industry that could be undermined by new tariffs on aviation that might lead to reciprocal foreign tariffs.
  • The international and domestic legal regime implementing the Agreement on Trade of Civil Aircraft created a duty-free trade environment for civil aircraft and parts which has been a significant factor in the continued growth of the U.S.-based industry. Interference in this regime contradicts the international agreement in place as well as existing Acts of Congress.

On July 9, 2026, the White House released its response to the Department of Commerce’s Section 232 investigation into aircraft parts imports.  The response focused on whether reliance on foreign-sourced components and materials poses a risk to U.S. national security, particularly in terms of supply chain resilience and domestic production capacity.

The published findings identify the administration’s issue: the U.S. aerospace sector remains dependent on foreign suppliers for key inputs, including high-spec engine components, avionics, and specialized materials. That dependency is a function of the industry’s efforts to create a global supply chain; in addition to creating more opportunities for innovation, the global supply chain also helped to promote the sale of aircraft and engines to foreign markets that were participating in that global supply chain.

Global dependency, according to Commerce, has been found to have the potential to become a liability.  The Administration explained that it intends to protect and strengthen domestic manufacturing as a means to address this perceived liability.

The Commerce Department has not yet recommended tariffs.  Nonetheless, the White House made it clear that tariffs on aircraft parts and other aviation inputs remain an option. The July 9 communication outlines the first step: a 180 period of directed negotiations with partner countries. The future outcome may include a more targeted, phased approach—potentially including selective tariffs, supply chain restrictions, and incentives to shift production back to the U.S. or to trusted partner countries.

Aircraft parts distributors in the United States should be concerned because potential measures could eventually include (1) new tariffs on aircraft parts imports and/or (2) newly negotiated impediments (such as impediments on countries that have not agreed to additional terms with the United States).  Such new impediments could also be alleged to be technical barriers to trade, which might create further problems if the United States is accused of fomenting such barriers.  New tariffs and new barriers create the potential for cost increases, sourcing disruptions, or new compliance requirements for United States companies that rely on foreign-sourced parts.

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Aircraft Parts Tariffs: Good News About Aircraft Parts from Brazil

July 17, 2026 by Leave a comment

Several recent developments could once again cause confusion with respect to aircraft parts imported into the United States.

The good news is that the new 25% tariff imposed on goods from Brazil will NOT apply to most aircraft parts. For the past year, the U.S. Trade Representative (USTR) has been investigating Brazil and its trade practices. The USTR determined that
certain of Brazil’s acts, policies, and practices are unreasonable or discriminatory and they burden or restrict United States commerce. On this basis, the USTR recommended a 25% tariff on goods of Brazil. This is expected to be published as a notice of action on Monday.

The 25% tariff will not apply to certain HTSUS codes. In particular, HTSUS codes identified by the administration as aviation parts are exempt from the tariff if the parts are actually intended for use on civil aircraft. Some civil aircraft parts are NOT identified in the HTSUS as aircraft parts and will be subject to the additional chapter 99 duties (even though they may be only used on civil aircraft). In the Federal Register notice this is expected to be described as an “Aircraft” scope limitation that will be implemented in subdivision (a)(iv) of U.S. note 50 (as found in subchapter III of chapter 99, HTSUS), which states:

As provided in heading 9903.05.05, the additional duty imposed by heading 9903.05.01 shall not apply to articles the product of Brazil that are 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, that otherwise meet the criteria of general note 6 of the HTSUS and are classifiable in the following provisions of the HTSUS, but regardless of whether a product is entered under a provision for which the rate of duty “Free (C)” appears in the “Special” sub-column: [a long list of tariff codes follows this text]

When entering civil aircraft parts from Brazil (like Embraer parts), the importer will want to enter them under their base tariff number, and then confirm that the base tariff number is listed in subdivision (a)(iv) (as described above). It is important to check this list of tariff numbers because some aircraft parts, like most fasteners (as just one example) will NOT be subject to this exemption. If you can confirm that the base tariff code for your Brazilian goods is listed among the exemption list, then you will need to record an additional tariff code number of 9903.05.05 to reflect that the parts are civil aircraft parts at are exempt from the newest 25% tariff on Brazilian goods.

If your base tariff code is not listed on the exemption list in subdivision (a)(iv), then your Brazilian-origin aircraft parts are likely to be subject to the additional 25% tariff on goods from Brazil.

BUT make sure you read our other article about the section 232 tariffs!

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Aircraft Parts Exceptions to the 10% Section 122 Duty under Tariff Code 9903.03.01

June 4, 2026 by Leave a comment

Even though the Court of International Trade has ruled that the 10% section 122 tariff on most imports is illegal, it is still being collected while the matter is on appeal. It is therefore especially important to know when your imported parts are excepted from this duty (and most civil aircraft parts are now excepted).

The 10% duty that is charged under the section 122 tariff is described at HTSUS 9903.03.01.

Some imported aircraft parts from some may enjoy specific exceptions from the tariff collection, but you (or your customs broker) need to declare the exception tariff on your entry documents. In order to take advantage of the tariff exception from the 10% section 122 tariff, the imported part must meet one of these conditions:

  1. The part’s base HTSUS classification (its tariff code) must be listed on a list of codes that applies to the particular source country (and these lists vary by country, so you need to verify the applicability each time) [the references are found in the table below], or
  2. The part’s base HTSUS classification (its tariff code) must be listed on the general list of codes found in HTSUS Chapter 99, Subchapter III, U.S. Note 2, subdivision (aa)(iv).

The jurisdictions that enjoy expanded section 122 tariff exceptions for aircraft parts imports include:

JurisdictionTariff Code Excepting Aircraft PartsChapter 99, Subchapter III, Provision that Identifies the Affected Parts
Brazil9903.01.82U.S. Note 2, subdivision (x)(iv)
European Union9903.02.76U.S. Note 2, subdivision (v)(xxii)
Japan9903.96.02U.S. Note 35, subdivision (b)
Lichtenstein9903.02.90U.S. Note 2, subdivision (v)(xxv)(c)
South Korea9903.02.81U.S. Note 2, subdivision (v)(xxiv)(b)
Switzerland9903.02.85U.S. Note 2, subdivision (v)(xxv)(c)
Taiwan9903.96.03U.S. Note 35, subdivision (c)
United Kingdom9903.96.01U.S. Note 35, subdivision (a)
Any Country9903.03.05U.S. Note 2, subdivision (aa)(iv)

Some jurisdictions have fairly short lists – for example Taiwan has a shorter list that does not include the “standard” 8807 heading for many aircraft parts. Imports from Taiwan that do not benefit under the Taiwan provisions may benefit from the “any country” provisions found in HTSUS 9903.03.05.

It is important to note that the analysis for identifying an aircraft parts exception to the 10% section 122 duty is different from the analysis for exception from base duties under the Agreement on Trade in Civil Aircraft. For most parts one may get the same answer for both, but for other parts the answers may differ!

Example: If you have a brazed aluminum plate fin heat exchanger then the tariff code is 8419.50.10; this is classified with a “C” in the HTSUS so it is excepted from the 4.2% base tariff. This tariff code is also found in the list associated with 9903.03.05, so the unit is excepted from 10% section 122 tariff found in chapter 99. This unit enters duty-free, with an exception from both the base duty and also the 10% section 122 duty described under HTSUS 9903.03.01.

This is just one of the many import regulations that we will be learning to navigate at the ASA/AFRA Annual Conference, on June 14-16, in Las Vegas, Nevada. Check out the conference agenda for full details on this and many other workshops available at the conference!

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Importing Compressed Gas in Cylinders

May 14, 2026 by Leave a comment

Imported compressed gas should be declared as a separate line item from the cylinder in which it is contained.

If you are importing a compressed gas (like an oxygen bottle) in a reusable cylinder and need to identify it for import purposes (e.g. on a CBP Form 7501), then you typically will need to declare the gas and the cylinder as two separate line items on the entry declaration.

One reason for this is found in the the HTSUS General Rules of Interpretation, which explains:

5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein:
(a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers,specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not,however, apply to containers which give the whole its essential character;
(b) Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

Normally, packaging would be merged into the entry for the material contained in the packaging, but for packaging susceptible to multiple uses (“clearly suitable for repetitive use”), that sort of packaging needs to be declared as a separate line item on the import entry.

This issue was addressed in a 2002 Customs Ruling, which involved a reusable steel gas cylinder containing carbon dioxide. The ruling explained that the carbon dioxide must be declared on import (in that case it was identified as HTSUS 2811.21.000) and the reusable steel gas cylinder also needed to be declared as part of the entry (in that case it was identified as HTSUS 7311.00.0090). There is a later ruling that supports this conclusion in a slightly different context: a 2016 Customs Ruling explains that the canisters in which a fire extinguishing agent was contained were to be declared separately from the contained chemical agent.

Today, steel cylinders for compressed gasses will be identified as 7311.00.00xx, where the last two digits depend on the configuration:

  • 7311.00.0030: a steel cylinder certified under the US DOT hazmat rules (Title 49 Part 178) and marked with DOT 3A, 3AX, 3AA, 3AAX, 3B, 3E, 3HT, 3T or DOT-E (including the specific exemption number);
  • 7311.00.0060: a steel cylinder certified under the US DOT hazmat rules (Title 49 Part 178) and but NOT marked according to the standards, above (for example, this could include a DOT 4D cylinder, as found in certain aircraft oxygen bottles);
  • 7311.00.0090: a steel cylinder that is NOT certified under the US DOT hazmat rules.

Aluminum cylinders for compressed gasses will be identified as HTSUS 7613.00.0000.

Some typical gasses (and their HTSUS tariff codes) that might be imported in aviation include:

  • 2804.30.0000: Nitrogen
  • 2804.40.0000: Oxygen
  • 2811.21.0000: Carbon Dioxide

It is important to identify your import with the right tariff code so that it will be subject to the right duties. The tariffs listed above all typically have a non-zero duty attached to them, and the cylinder and the gas may each have different duty rates associated with them.

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Classifying Inertial Reference Units (IRUs)

February 17, 2026 by Leave a comment

I have been seeing a number of companies having trouble with classifications.  This is the second of what will likely be an occasional series discussing classification.  This blog post will address Inertial Reference Units or IRUs.

Please note that the following analysis is based on the regulations and standards as they are written today.  Export and import law, is subject to change.  This is particularly true of tariffs over the past year.  So you should always verify your classification under the current regulations and standards.

Classification is necessary for both exports and imports.  Exports of civil aircraft parts are typically classified under Export Commodity Classification Numbers or ECCNs.  An exception arises when the goods are controlled under the International Traffic in Arms Regulations (ITARs).

Export Classification

ECCNs are typically five characters long.  Many civil aircraft parts are characterized under ECCNs like 9A991, but this ONLY applies to civil aircraft parts that are (1) not specified elsewhere and (2) specially designed for civil aircraft.  The first condition is important because some parts (like engines, avionics, etc.) are specified elsewhere and may have different export limits and licensing provisions based on their proper classification.  

In our case, IRUs are typically classified elsewhere.  Even though they may be aircraft parts, when there is a more specific classification, they must rely on the most specific classification.

Many civil aircraft IRUs are classified under ECCN 7A103.  One might be tempted by ECCN 7A003, but the regulations specify that ECCN 7A003 “does not apply to ‘inertial measurement equipment or systems’ which are certified for use on ‘civil aircraft’ by civil aviation authorities of one or more Wassenaar Arrangement Participating States.”

ECCN 7A103 has two primary reasons for control: missile technology (MT) and anti-terrorism (AT). The missile technology reason for control could be an issue for many export destinations, as there is a license obligation associated with most export destinations (currently there are exceptions for Australia, Canada,and the UK). If you plan to rely on a license exception, then please read the regulations carefully as some destinations may be unable to rely on certain license exceptions when exporting articles controlled under ECCN 7A103.

Import Classification

Imported goods are typically classified under harmonized tariff codes from the Harmonized Tariff Schedule of the United States (HTSUS).  These codes can be ten digits long (when you include the statistical reporting number).  There are also a lot more tariff numbers than there are ECCNs, which makes navigating the tariff schedule a little more daunting.  

The United States Government has classified civil aircraft IRUs under HTSUS heading 9014.20.8040 for import purposes. Note that if you click through the link, you will see an outdated number that was assigned; 9014.20.8040 is the modern equivalent tariff number. But that assignment relies on a specific fact pattern: that the IRU (a) is not an optical instrument, (b) does not measure an electrical phenomenon, and (c) is for use in civil aircraft. Other types of inertial measuring device have fallen into other HTSUS classifications (like a Northrupp Grumman IMU that was characterized as 9014.20.20 in the year 2020). So look carefully at the characteristics of your device to ensure it is properly classified under 9014.20.8040.

Proper tariff classification is important because different tariffs have different duty amounts.  9014.20.8040 is specific to aviation use inertial reference units, so classification under 9014.20.8040 currently yields a base duty of zero percent (this may be modified by chapter 99 tariffs).

Past Classification Articles

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Classifying Fasteners

January 6, 2026 by 1 Comment

I have been seeing a number of companies having trouble with classifications.  This is the first of what will likely be an occasional series discussing classification.  This blog post will address fasteners.

Please note that the following analysis is based on the regulations and standards as they are written today.  Export and import law, is subject to change.  This is particularly true of tariffs over the past year.  So you should always verify your classification under the current regulations and standards.

Classification is necessary for both exports and imports.  Exports of civil aircraft parts are typically classified under Export Commodity Classification Numbers or ECCNs.  An exception arises when the goods are controlled under the International Traffic in Arms Regulations (ITARs).  

Export Classification

ECCNs are typically five characters long.  Many civil aircraft parts are characterized under ECCN 9A991.  This ECCN applies to civil aircraft parts that are (1) not specified elsewhere and (2) specially designed for civil aircraft.  The first condition is important because some parts (like engines, avionics, etc.) are specified elsewhere and may have different export limits and licensing provisions based on their proper classification.  The second condition is equally important because the term “specially designed” is a legal term of art that has a specific definition under the Commerce Department regulations.  The definition specifically excludes fasteners, so fasteners typically will not be classified under ECCN 9A991.  Instead, they will typically be classified under EAR99.

Import Classification

Imported goods are typically classified under harmonized tariff codes from the Harmonized Tariff Schedule of the United States (HTSUS).  These codes can be ten digits long (when you include the statistical reporting number).  There are also a lot more tariff numbers than there are ECCNs, which makes navigating the tariff schedule a little more daunting.  Classifying fasteners for import can reflect a more complex analysis than what we just had to perform for fastener export classification.  

Normally, fasteners will be classified based on their material.  An article made of iron or steel is typically classified within HTSUS Chapter 73 of the tariff schedule.  This chapter is 45 pages long.  Within the chapter are four-digit headings and the heading 7318 addresses fasteners (made from iron or steel).  If the fastener is a bolt, then bolts made from iron or steel will be classified under 7318.15.20xx.  This classification would also encompass bolts that are imported with their nuts or washers (the nuts and washers do not have to be declared separately).  The final two characters (the “xx” in the example above) are the statistical reporting number and this number will depend on the size and nature of the bolt.  If the bolt had a shank or threads less than 6mm, then the statistical reporting number would be “10” (so the full tariff code would be 7318.15.2010.  If the shank or thread is 6mm or more then the nature of the bolt will drive the statistical reporting number: for example,  a structural bolt is classified under 7318.15.2030.  

But if the same bolt was made from a different material then the importing tariff number could be different. An aluminum bolt would be found on the schedule for aluminum articles (HTSUS Chapter 76).  It would be identified as 7616.10.xxxx.  A threaded bolt with a shank or threads less than 6mm would be identified as 7616.10.7030.   A threaded bolt with a shank or thread diameter of 6mm or more would be classified as 7616.10.9030.

Proper tariff classification is important because different tariffs have different duty amounts.  For example, the 7616.10.7030 bolt would be subject to a 5.5% duty rate when imported into the United States.  The larger diameter 7616.10.9030 bolt would be subject to a 6% duty rate when imported into the United States.  

A common mistake is to classify these sorts of fasteners as aircraft parts under heading 8807, which is a general classification for aircraft parts that do not have a more specific code that describes them.  Heading 8807 doesn’t apply to our fasteners because there are more specific classifications for bolts.  This misclassification violates the import tariff rule that requires assignment of the most specific tariff description.  It also leads to underpaid duties, which can lead to penalties when the underpayment is detected.

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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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Some Electronic Equipment Excepted From the Latest Tariffs

April 12, 2025 by Leave a comment

The Administration has announced the first product-based exceptions to the broad tariffs that it has issued on imported goods. The full announcement can be seen in the Presidential Memorandum.

Items under the following headings and subheadings appear to be excepted from the duties imposed by Executive Order 14257.

  • 8471
  • 8473.30
  • 8486
  • 8517.13.00
  • 8517.62.00
  • 8523.51.00
  • 8524
  • 8528.52.00
  • 8541.10.00
  • 8541.21.00
  • 8541.29.00
  • 8541.30.00
  • 8541.49.10
  • 8541.49.70
  • 8541.49.80
  • 8541.49.95
  • 8541.51.00
  • 8541.59.00
  • 8541.90.00
  • 8542

These are mostly aimed at computers, smartphones, modems/routers, solid state storage, monitors/displays. They also include semiconductors and integrated circuits, and some production equipment for such items. Although these headings and subheadings do not intrinsically describe aircraft parts, there may be certain aircraft parts that are properly classified under some of these headings and subheadings, like certain displays and certain onboard computer equipment.

More importantly, this shows that the White House is willing to except certain favored industries, so it is possible that an aviation exception could be carved-out.

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Country of Origin

April 5, 2025 by 1 Comment

With the new tariffs going into effect, it will be important to be able to identify the country of origin for your imports, so you can properly calculate the effective tariff(s).

First of all, “country of origin” means the country of manufacture, production, or growth of any article of foreign origin entering the United States. If you are importing an article you bought from an air carrier in country “A” but it was actually manufactured wholly in country “B,” then it is a product of “B” – not “A” – for purposes of determining country of origin. The rules for this are found in the ‘country-of-origin-marking-requirements’ in 19 C.F.R. Part 134.

If the goods are subject to further work or if material is added to the goods in another country, then this must be a “substantial transformation” in order to render such other country the “country of origin.”

Example: Imagine that you have aircraft parts produced in the U.S., the UK and Japan. The parts are imported into France where they are assembled into an aircraft. The assembly into an aircraft in France is a complex assembly operation that is typically considered to be transformative. That means that the complete aircraft is a product of France in this case.

Once parts have been transformed because of a complex assembly operation, Customs has confirmed that they retain the country-of-origin upon disassembly. Thus, parts that were made in the U.S. but transformed into products of France when assembled into an aircraft will continue to be products of France even after they are removed from the aircraft.

There is case law suggesting that country of origin can sometimes shift: the connection to the country where an article was built may be broken due to the extended period of time that the article was in use in another country. Ashdown, U.S.A. Inc. v. United States, 696 F. Supp. 661 (CIT 1988). However, Customs has confirmed that this principle applies “primarily in instances where the country of origin of used articles cannot be determined.” With aviation products, we typically have adequate records to identify the country of origin so use for a long time in some other country typically does not change the country of origin.

There are special rules for products of Canada or Mexico. These goods are subject to the USMCA, and subject to the country-of-origin rules set forth in 19 C.F.R. Part 102. The USMCA rules allow for ‘foreign’ constituents that come from the US, Canada or Mexico, and they also allow for a certain percentage of other foreign materials without upsetting the proposition that the goods are a product of the US, Canada or Mexico.

The USMCA country-of-origin rules set forth in 19 C.F.R. Part 102 also apply to certain other free trade agreements, like the U.S. trade agreements with Bahrain and Morocco.

One important USMCA country-of-origin rule is that for products under heading 8807 (which applies to aircraft parts that cannot be identified more specifically under another tariff heading), constituent sub-components will become subject to the same country-of-origin as the complete assembly (they undergo a transformation) if their base tariff sub-heading changes. So, Chapter 73 fasteners can be transformed and change their country of origin when they are assembled into a new USMCA product.

Typically, US goods are not subject to a duty when they re-enter the United States. But they can be subject to a duty when they are “advanced in value” abroad. The duty in that case applies to the foreign advancement in value. If a US-produced aircraft part is repaired in a foreign country, but the advancement does not transform the aircraft part into something wholly different, then when the part returns to the U.S., the duty would be paid based on the value of the repair (typically, invoice price for the repair) so that the original U.S. value would not be considered as part of this equation.

Example: if a U.S. good is sent to Canada for repair, and then returned to the U.S., the value of the repair will be subject to the applicable import duty under HTSUS subheading 9802.00.50. The repair will be a product of Canada (but not a good of Canada that might be subject to the USMCA). The amount of the import duty applied to the value of the repair will be 25% (under the current tariff for products of Canada, subheading 9903.01.10).

Note that the application of this rule to complete aircraft may be different! Normally, aircraft are subject to the same tariff rules as vessels. Under the U.S. Code, the tariff rules that previously applied a duty to repairs performed on aircraft were changed by section 601 of the Trade Agreements Act of 1979. That exempted aircraft from the duties previously applicable to them (the exemption appears in the vessel rules because of the norm that vessel rules typically apply). The Customs and Border Protection has held that “U.S.-registered commercial aircraft that are repaired or overhauled foreign are not required to make formal entry and pay duty on repairs or overhaul when returning to the United States.”

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(1) Tariff Update (2) Advice for Products of Canada and/or Mexico (3) Advice For Non-US Exporters

April 3, 2025 by 1 Comment

This evening we have guidance for you about tariffs:

  • An update on the latest tariffs
  • Guidance on using the USMCA to avoid certain tariffs on goods originating in Canada and Mexico
  • Guidance for non-US exporters who want to mitigate the impact of U.S. tariffs

Update on New Tariffs

I am getting a lot of questions about the latest round of tariffs and how they will affect aircraft parts that are the products of non-US countries and are imported into the United States. As of this evening, the United States has not yet filed the new tariff documents with the Federal Register. In some cases these filings can differ in significant ways from the descriptions found in the executive orders, so it is important to wait to read these documents before we can give any compliance advice. It is unfortunate that the short time-frame for implementation (between Executive Order and implementation date) lately has meant that the tariffs may not be published until after they become effective.

An example of the sort of things that are contained in the tariff details includes the USMCA provision that we talk about in the next section.

We will watch for the advance copies and get you information on the latest round of tariffs as soon as possible.

Products of Mexico and/or Canada

Products of Mexico and Canada are currently subject to 25% duties under the applicable Chapter 99 tariffs. We wrote about this in a previous blog post. One potential way to mitigate this is to import goods under the USMCA provisions. The USMCA applies to “goods originating in the territory of a USMCA country.” This includes goods that are 100% a product of the U.S. Canada or Mexico, but it also includes some goods that are mostly made of material from these jurisdictions. It also includes certain goods that are made from non-USMCA materials (‘non-originating goods’) according to rules that vary based on the tariff subheading of the imported good. The details of this exception are provided in General Note 11 to the HTSUS; this general note is 136 pages long, so I won’t attempt summarize it all, here, but I will note that aircraft parts imported under heading 8807 may be made from non-originating goods of any other (different) subheading and still have the potential to be classified as USMCA goods as long as they are “transformed” in a USMCA country. One reason for this is the process that makes them an aircraft part under heading 8807 is typically considered transformative.

You typically need to enter USMCA goods under the USMCA provisions of 9903.01.04 [Mexico] or 9903.01.14 [Canada] to avoid the 25% tariffs.

Special USMCA Note: Many aircraft parts are classified under other tariff headings, but the “aircraft parts” heading is 8807. Effective January 27, 2022, the primary tariff heading for aircraft parts changed from 8803 to 8807. The USMCA was originally signed in 2018 and became effective in 2020. This was before the change of tariff headings, so USMCA references 8803, instead of 8807. To find the 8807 reference in US law (as it applies to the USMCA) you need to start with 19 C.F.R. 102.11(a), which provides the rules for determining the country of origin of imported goods. That regulation incorporates 19 C.F.R. 102.20, which provides the up-to-date tariff rules including the rules for 8807 aircraft parts.  You can confirm that this rule is intended to be used to interpret the USMCA by looking at the scope clause found in 19 C.F.R. 102.0. 

One of the USMCA requirements in a certification of origin. You ought to consider working with the producer in Canada or Mexico – they may have a USMCA certificate of origin template already available but if they don’t then check out the ASA Webinar from last week for more details on what needs to be in that certificate. You can also find the nine elements of a certificate of origin listed in Annex 5-A to Chapter 5 of the USMCA. If the U.S. import from Canada or Mexico is 100% a product of Canada or Mexico then the certificate may be simple, but if a portion of the constituent components comes from outside of the U.S., Canada or Mexico then there are rules for whether it can be certified. The rules are too voluminous to repeat here but (as stated above) General Note 11 provides some useful guidance.

One final note: if you are sending goods to Canada or Mexico for repair, then the repair is considered an “advancement in value,” and the cost (or fair market value) of that advancement is subject to duty. This applies to U.S. goods. Examples:

  • If you send a US good to Canada and it is repaired there, then this is an “advancement in value” transaction whose value is subject to the 25% tariff on products of Canada. Dutiable value is typically going to be the invoiced amount for the repair. See Tariff Subheadings 9802.00.50 and 9903.01.10.
  • If you send a US good to Canada and it is repaired there on a warranty repair, then this is an “advancement in value” transaction. The value will be subject to the 25% tariff on products of Canada. Because there is typically no charge for a warranty repair, the value will be calculated based on the fair market value of the work performed. See Tariff Subheadings 9802.00.40 and 9903.01.10.

Guide for Non-US Exporters

For non-U.S. exporters watching the tariff news out of the United States, it can be frustrating to watch and think about how this could affect your own business. In effect, a tariff is like a tax on your goods that your customer in the U.S. must pay to the government. It effectively increases the cost to your customer (making your goods potentially less attractive) without putting any money into your pocket.

Working together, we can help to make sure that your importing customers don’t pay any more in impot duties than they need to. Here are some useful rules to remember:

Rule Number One: Tariffs apply to non-US goods and non-US “added value.” If you are selling Boeing parts that were made in the U.S. (and were not advanced in value outside the U.S.) to a U.S. customer, then the importer probably does not need to pay duty on those goods.

Rule Number Two: Communicate with your U.S. customer. Make sure that you are cooperating to make the right certifications and/or representations to minimize the effect of U.S. tariffs.

Rule Number Three: Try to identify strategies for minimizing duties associated with the tariffs. The USMCA strategy described above is just one way to use the tariff rules to reduce the potential duties that the importer needs to pay.

Rule Number Four: Be careful of the way that you classify your goods. There are special tariff codes for different situations. The USMCA provisions of 9903.01.04 [Mexico] and 9903.01.14 [Canada] are just two examples of tariff classifications that can help save your customer money. Also, make sure that you are accurately classifying goods (see our blog article on the subject). Misclassified goods run the risk of being held up in Customs.

The aviation industry is a global community. We will get through these tariffs, together.

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