Beauty is in the eye of the beholder, as the phrase has it. So while US President Donald Trump may see beauty in tariffs, the prospect of their imposition – and their potential to trigger a tit-for-tat trade war – means the aerospace industry takes quite the opposite view.
The immediate challenge for the sector is the degree of uncertainty involved: no-one really knows when the US tariffs may come into force, nor at what level they will be set.
As might be expected, this makes planning or forecasting with any degree of accuracy nigh-on impossible.
At this point, mitigation has become the watchword of all the sector’s chief executives as they attempt to chart a course through increasingly choppy waters.
Against this backdrop, Airbus and Rolls-Royce became the latest to report their first-quarter results.
While both turned in a solid performance over the first three months of the year, neither was willing or able to look much into the future.
“We are closely monitoring and assessing the situation, but it is too early to quantify the impact today,” said Airbus chief executive Guillaume Faury, who added that the European airframer is exploring strategies to mitigate their impact.
Tufan Erginbilic, his counterpart at Rolls-Royce, struck a similar tone: “We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking,” he said.
Although there may be some clever logistical tweaks available to both firms to lessen their exposure to any tariffs, it is likely there will still be additional costs. But costs borne by whom?
Faury was clear that while they may not like it, US airlines would have to absorb any tariff-related increases – charges that would presumably be funnelled back to passengers through higher ticket prices.
His comments echoed those of Safran chief executive Olivier Andries who said his firm would “not be shy” in passing on any cost rises to its customers – whether OEMs or airlines.
Which, of course, raises the question about the impact on Boeing, particularly if tariffs persist in the long term; in that scenario Faury sees “significant” consequences for US industry.
In his view, the “endgame” will be a reversion to the zero-tariff agreement on civil aerospace goods which came into effect all the way back in 1980.
But neatly summing up the current levels of confusion, he added: “By when, and how, remains to be seen.”
More details of Spirit AeroSystems’ impending break-up also emerged this week, as the embattled US aerostructures supplier revealed further financial support from Airbus. This is intended to keep Spirit afloat until its acquisition by Boeing can be finalised – a deal in which Bombardier may yet also become involved.
Meanwhile, if the USA is proving problematic for some, that is not true for all: Heart Aerospace, to all intents and purposes known as a Swedish business, announced plans to transplant its whole operation to California.