Civil Aircraft Parts Continue to Enjoy Exceptions from New Tariffs (With Some Exceptions)

Many of you have read about the new United States tariffs on products from 59 countries (Hong Kong is listed separately from China even though they are now one country). The new tariffs are levied under the authority of section 301 of the Trade Act. Products of these countries will be subject to chapter 99 tariffs that impose 10% or 12.5% duties on imported goods. The new tariffs are expected to be published this week. They are also expected to apply to goods entered into the United States on or after July 24, 2026.

The good news for aviation is that there is a specific aviation exception for certain civil aircraft parts. Details about which aircraft parts are covered are included below, but there will certainly be some parts – like certain fasteners – that do not benefit from the exception and that will be subject to import duties.

The affected source countries and jurisdictions are as follows:

AlgeriaChileGuyanaKuwaitPakistanSwitzerland
AngolaChinaHondurasLibyaPeruTaiwan
ArgentinaColombiaHong Kong, ChinaMalaysiaPhilippinesThailand
AustraliaCosta RicaIndiaMexicoQatarTrinidad and Tobago
The BahamasDominican RepublicIndonesiaMoroccoRussiaTürkiye
BahrainEcuadorIraqNew ZealandSaudi ArabiaUnited Arab Emirates
BangladeshEgyptIsraelNicaraguaSingaporeUnited Kingdom
BrazilEl SalvadorJapanNigeriaSouth AfricaUruguay
CambodiaEuropean UnionJordanNorwaySouth KoreaVenezuela
CanadaGuatemalaKazakhstanOmanSri LankaVietnam

Many aviation products will be excluded from these new chapter 99 tariffs. Those aircraft parts that are excluded should be declared under tariff code 9903.05.88. This is the tariff code that excludes civil aircraft parts from the newest Chapter 99 tariffs.

Normally aircraft parts that are exempt from duties under the Agreement on Trade in Civil Aircraft are identified with a “C” in the “special” column of the Harmonized Tariff Schedule of the United States (HTSUS). That is not the rule for the tariff code 9903.05.88 exception. Instead, in order to benefit from tariff code 9903.05.88, the base tariff code for the article must be in this list (the master version of this list can be found in Chapter 99, subchapter III, U.S. note 52, subdivision (d)):

3917.21.00 3917.22.00 3917.23.00 3917.29.00 3917.31.00 3917.33.00
3917.39.00 3917.40.00 3926.90.45 3926.90.94 3926.90.96 3926.90.99
4008.29.20 4009.12.00 4009.22.00 4009.32.00 4009.42.00 4011.30.00
4012.13.00 4012.20.10 4016.10.00 4016.93.50 4016.99.35 4016.99.60
4017.00.00 4504.90.00 4823.90.10 4823.90.20 4823.90.31 4823.90.40
4823.90.50 4823.90.60 4823.90.67 4823.90.70 4823.90.80 4823.90.86
6812.80.90 6812.99.10 6812.99.20 6812.99.90 6813.20.00 6813.81.00
6813.89.00 7007.21.11 7304.31.30 7304.31.60 7304.39.00 7304.41.30
7304.41.60 7304.49.00 7304.51.10 7304.51.50 7304.59.10 7304.59.20
7304.59.60 7304.59.80 7304.90.10 7304.90.30 7304.90.50 7304.90.70
7306.30.10 7306.30.30 7306.30.50 7306.40.10 7306.40.50 7306.50.10
7306.50.30 7306.50.50 7306.61.10 7306.61.30 7306.61.50 7306.61.70
7306.69.10 7306.69.30 7306.69.50 7306.69.70 7312.10.05 7312.10.10
7312.10.20 7312.10.30 7312.10.50 7312.10.60 7312.10.70 7312.10.80
7312.10.90 7312.90.00 7322.90.00 7324.10.00 7324.90.00 7326.20.00
7413.00.90 7608.10.00 7608.20.00 8302.10.60 8302.10.90 8302.20.00
8302.42.30 8302.42.60 8302.49.40 8302.49.60 8302.49.80 8302.60.30
8307.10.30 8307.90.30 8407.10.00 8408.90.90 8409.10.00 8411.11.40
8411.11.80 8411.12.40 8411.12.80 8411.21.40 8411.21.80 8411.22.40
8411.22.80 8411.81.40 8411.82.40 8411.91.10 8411.91.90 8411.99.10
8411.99.90 8412.10.00 8412.21.00 8412.29.40 8412.29.80 8412.31.00
8412.39.00 8412.80.10 8412.80.90 8412.90.90 8413.19.00 8413.20.00
8413.30.10 8413.30.90 8413.50.00 8413.60.00 8413.70.10 8413.70.20
8413.81.00 8413.91.10 8413.91.20 8413.91.90 8414.10.00 8414.20.00
8414.30.40 8414.30.80 8414.51.30 8414.51.90 8414.59.30 8414.59.65
8414.80.05 8414.80.16 8414.80.20 8414.80.90 8414.90.10 8414.90.30
8414.90.41 8414.90.91 8415.10.60 8415.10.90 8415.81.01 8415.82.01
8415.83.00 8415.90.40 8415.90.80 8418.10.00 8418.30.00 8418.40.00
8418.61.01 8418.69.01 8419.50.10 8419.50.50 8419.81.50 8419.81.90
8419.90.10 8419.90.20 8419.90.30 8419.90.50 8419.90.85 8421.19.00
8421.21.00 8421.23.00 8421.29.00 8421.31.00 8421.32.00 8421.39.01
8424.10.00 8425.11.00 8425.19.00 8425.31.01 8425.39.01 8425.42.00
8425.49.00 8426.99.00 8428.10.00 8428.20.00 8428.33.00 8428.39.00
8428.90.03 8443.31.00 8443.32.10 8443.32.50 8479.89.10 8479.89.20
8479.89.65 8479.89.70 8479.89.95 8479.90.41 8479.90.45 8479.90.55
8479.90.65 8479.90.75 8479.90.85 8479.90.95 8483.10.10 8483.10.30
8483.10.50 8483.30.40 8483.30.80 8483.40.10 8483.40.30 8483.40.50
8483.40.70 8483.40.80 8483.40.90 8483.50.40 8483.50.60 8483.50.90
8483.60.40 8483.60.80 8483.90.10 8483.90.20 8483.90.30 8483.90.50
8483.90.80 8484.10.00 8484.90.00 8501.20.50 8501.20.60 8501.31.50
8501.31.60 8501.31.81 8501.32.20 8501.32.55 8501.32.61 8501.33.20
8501.33.30 8501.33.61 8501.34.61 8501.40.50 8501.40.60 8501.51.50
8501.51.60 8501.52.40 8501.52.80 8501.53.40 8501.53.60 8501.61.01
8501.62.01 8501.63.01 8501.71.00 8501.72.10 8501.72.20 8501.72.30
8501.72.90 8501.80.10 8501.80.20 8501.80.30 8502.11.00 8502.12.00
8502.13.00 8502.20.00 8502.31.00 8502.39.00 8502.40.00 8504.10.00
8504.31.20 8504.31.40 8504.31.60 8504.32.00 8504.33.00 8504.40.40
8504.40.60 8504.40.70 8504.40.85 8504.40.95 8504.50.40 8504.50.80
8507.10.00 8507.20.80 8507.30.80 8507.50.00 8507.60.00 8507.80.82
8507.90.40 8507.90.80 8511.10.00 8511.20.00 8511.30.00 8511.40.00
8511.50.00 8511.80.20 8511.80.40 8511.80.60 8514.20.40 8516.80.40
8516.80.80 8517.14.00 8517.61.00 8517.69.00 8517.71.00 8518.10.40
8518.10.80 8518.21.00 8518.22.00 8518.29.40 8518.29.80 8518.30.10
8518.30.20 8518.40.10 8518.40.20 8518.50.00 8519.81.10 8519.81.20
8519.81.25 8519.81.30 8519.81.41 8519.89.10 8519.89.20 8519.89.30
8521.10.30 8521.10.60 8521.10.90 8522.90.25 8522.90.36 8522.90.45
8522.90.58 8522.90.65 8522.90.80 8526.10.00 8526.91.00 8526.92.10
8526.92.50 8528.42.00 8528.62.00 8529.10.21 8529.10.40 8529.10.91
8529.90.04 8529.90.05 8529.90.06 8529.90.09 8529.90.13 8529.90.16
8529.90.19 8529.90.21 8529.90.24 8529.90.29 8529.90.33 8529.90.36
8529.90.39 8529.90.43 8529.90.46 8529.90.49 8529.90.55 8529.90.63
8529.90.68 8529.90.73 8529.90.77 8529.90.78 8529.90.81 8529.90.83
8529.90.87 8529.90.88 8529.90.89 8529.90.93 8529.90.95 8529.90.97
8529.90.98 8531.10.00 8531.20.00 8531.80.15 8531.80.90 8536.70.00
8539.10.00 8539.51.00 8543.70.42 8543.70.45 8543.70.60 8543.70.80
8543.70.91 8543.70.95 8543.90.12 8543.90.15 8543.90.35 8543.90.65
8543.90.68 8543.90.85 8543.90.88 8544.30.00 8801.00.00 8802.11.01
8802.12.01 8802.20.01 8802.30.01 8802.40.01 8805.29.00 8806.10.00
8806.21.00 8806.22.00 8806.23.00 8806.24.00 8806.29.00 8806.91.00
8806.92.00 8806.93.00 8806.94.00 8806.99.00 8807.10.00 8807.20.00
8807.30.00 8807.90.90 9001.90.40 9001.90.50 9001.90.60 9001.90.80
9001.90.90 9002.90.20 9002.90.40 9002.90.70 9002.90.85 9002.90.95
9014.10.10 9014.10.60 9014.10.70 9014.10.90 9014.20.20 9014.20.40
9014.20.60 9014.20.80 9014.90.10 9014.90.20 9014.90.40 9014.90.60
9020.00.40 9020.00.60 9025.11.20 9025.11.40 9025.19.40 9025.19.80
9025.80.10 9025.80.15 9025.80.20 9025.80.35 9025.80.40 9025.80.50
9025.90.06 9026.10.20 9026.10.40 9026.10.60 9026.20.40 9026.20.80
9026.80.20 9026.80.40 9026.80.60 9026.90.20 9026.90.40 9026.90.60
9029.10.80 9029.20.40 9029.90.80 9030.10.00 9030.20.05 9030.20.10
9030.31.00 9030.32.00 9030.33.34 9030.33.38 9030.39.01 9030.40.00
9030.84.00 9030.89.01 9030.90.25 9030.90.46 9030.90.66 9030.90.68
9030.90.89 9031.80.80 9031.90.21 9031.90.59 9031.90.91 9032.10.00
9032.20.00 9032.81.00 9032.89.20 9032.89.40 9032.89.60 9032.90.21
9032.90.41 9032.90.61 9033.00.90 9104.00.05 9104.00.10 9104.00.20
9104.00.25 9104.00.30 9104.00.40 9104.00.45 9104.00.50 9104.00.60
9109.10.50 9109.10.60 9109.90.20 9401.10.40 9401.10.80 9403.20.00
9403.70.40 9403.70.80 9405.11.40 9405.11.60 9405.11.80 9405.19.40
9405.19.60 9405.19.80 9405.61.20 9405.61.40 9405.61.60 9405.69.20
9405.69.40 9405.69.60 9405.92.00 9405.99.20 9405.99.40 9620.00.50
9620.00.60 9802.00.40 9802.00.50 9802.00.60 9802.00.80 9818.00.05
9818.00.07

Section 301 is now codified at 19 U.S.C. §§ 2411-2420.

The Congressional Research Service has published a history of Section 301 and its past uses.

Implementing the Reduced China Tariffs

This week, the United States Trade Representative (USTR) published a notice that would reduce reducing the rate of additional tariffs on List 4A products to 7.5%, effective February 14, 2020.

Goods on List 4A are currently subject to a 15% additional tariff, effective Sept. 1, 2019.

This reduction does not affect the 25% tariffs that apply to aircraft parts imported from China.

The notice is only found on the USTR website and has not yet been published in the Federal Register.

New Agreement With China – No Relief for US Aircraft Parts Importers

I almost titled this post “Boeing Wins. Aviation Loses.”  But I am not sure that Boeing even wins under this Agreement.

The United States and China have signed a new trade agreement.  For most of the aviation industry, very little changes.  Aircraft parts imported into the United States that were subject to the 25% duty associated with the section 301 tariff, continue to be subject to the 25% duty levied on parts from China.

China has agreed to place orders for additional manufactured goods.  The list of manufactured goods includes complete aircraft, but does not include aircraft parts.  The obligation can be met by merely placing orders.  Thus China can meet its obligations under the new agreement by placing orders for aircraft for the first three years and then refusing delivery after the three year term of the agreement.  So even though it looks like this could be a boon for Boeing, it might not be as beneficial as one might think.  Furthermore, there is no agreement to purchase aircraft parts, and companies like Boeing sell a significant volume of parts.

The agreement does not appear to change the List One tariffs.  The list one tariffs became effective on July 6, 2018 and placed an additional duty rate of 25% on $34 billion worth of goods from China.  The list one goods include (but are not limited to):

  • 40113000 (New pneumatic tires, of rubber, of a kind used on aircraft)
  • 40121300 (Retreaded pneumatic tires, of rubber, of a kind used on aircraft)
  • 84071000 (Spark-ignition reciprocating or rotary internal combustion piston engines for use in
    aircraft)
  • 84091000 (Parts for internal combustion aircraft engines)
  • 84111140 (Aircraft turbojets of a thrust not exceeding 25 kN)
  • 84111240 (Aircraft turbojets of a thrust exceeding 25 kN)
  • 84112140 (Aircraft turbopropellers of a power not exceeding 1,100 kW)
  • 84112240 (Aircraft turbopropellers of a power exceeding 1,100 kW)
  • 84118140 (Aircraft gas turbines other than turbojets or turbopropellers, of a power not
    exceeding 5,000 kW)
  • 84118240 (Aircraft gas turbines other than turbojets or turbopropellers, of a power exceeding
    5,000 kW)
  • 85030045 (Stators and rotors for electric generators for use on aircraft)
  • 85030090 (Parts for electric generators suitable for use on aircraft)
  • 85443000 (Insulated ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft
    or ships)
  • 88031000 (Parts of airplanes and other aircraft, propellers and rotors and parts thereof)
  • 88032000 (Parts of airplanes and other aircraft, undercarriages and parts thereof)
  • 88033000 (Parts of airplanes and helicopters, not elsewhere specified or included)

As a condition of the agreement, the United States apparently agreed to cut certain (non-aviation) tariffs from a 15% duty to a 7.5% duty.  The USTR Fact Sheet acknowledges that “The United States has agreed to modify its Section 301 tariff actions in a significant way.”  These alleged modifications/reductions in duty rates are not part of the written agreement between China and the US, that has been released, so it is possible that US importers will continue to pay these duties.