Military, Regulatory

How US Tariffs on China Impact Helicopters

By Woodrow Bellamy III, Nick Zazulia | April 5, 2018
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Boeing released a statement reacting to the latest round of tariffs proposed against China by U.S. President Donald Trump. Here a Boeing AH-64E is pictured. Photo courtesy of Boeing

U.S. President Donald Trump’s latest attempt at imposing new import charges on Chinese goods saw the levying of a 25% tariff on some 1,300 items, including helicopters and helicopter parts.

The proposed tariffs, which amount to $12.5 billion on $50 billion in goods, would go into effect no sooner than June. Among the targeted products are parts for internal combustion aircraft engines and turbojets, wiring and rubber for use on aircraft, optical instruments, parts and accessories for aeronautical or space navigation and dozens of other line items related to aerospace.

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There are also some specific references to helicopters mentioned in the list of targeted items:

  • "Helicopters, with an unladen weight not over 4,409 pounds."
  • "Helicopters, with an unladen weight over 4,409 pounds."
  • "Parts of airplanes and other aircraft, propellers and rotors and parts thereof."
  • "Parts of airplanes and helicopters."

The tariffs on Chinese aerospace, electronics and machinery parts and products follow China’s tariffs on primarily agricultural U.S. exports, which came in response to America’s announcement of extra taxes on Chinese steel, aluminum and solar panel parts.

In response to the latest — and largest — effort from the U.S., China broadened its proposed tariffs to cover a wide range of agricultural products that would balance the ledger with $50 billion more in duties.

That follows China’s stated promise to respond in kind to any U.S. tariffs. “As the Chinese saying goes, it is only polite to reciprocate,” was the Chinese Embassy’s official response.

As the escalating reciprocation builds toward a trade war between the world’s two largest economies, many worry about the collateral damage it would do. Some economists believe that much of this is posturing stronger negotiating positions when the two sides do come together. But if that takes too long, the tariffs would take effect, and the relevant industries would feel the impact until an agreement is reached.

Boeing is among those hoping for a quick resolution before the tariffs go into effect.

“Boeing is confident that dialogue continues. While both governments have outlined positions that could do harm to the global aerospace industry, neither has yet imposed these drastic measures. We will continue in our own efforts to proactively engage both governments and build on the recent assurances by U.S. and Chinese leaders that productive talks are ongoing. A strong and vibrant aerospace industry is important to the economic prosperity and national security of both countries,” the company said in statement Wednesday.

None of the other major aviation industry airframe OEMs responded to the newly proposed tariffs.

One of the tariffs Trump announced was a 25% import tariff for foreign-made steel and a 10% tariff for aluminum. Mexico and Canada were excluded from that tariff.

When the steel and aluminum tariffs were announced, the CEO of United Technologies Corp. — one of the industry’s biggest suppliers of helicopter engines said during an interview with CNBC, that it's not in favor of the tariffs.

"We don't want to see a trade war with China," said Hayes. "We import a lot from China. They import a lot of aerospace parts from us and specifically from Boeing. As you know, Boeing is the biggest customer that we have on the aerospace systems side."

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