New international tariffs are shaking up the aviation industry. Boeing and Airbus, both deeply reliant on global supply chains, now face rising production costs and shifting delivery strategies. As governments impose new duties, aircraft prices may climb, manufacturing could slow, and the competitive balance between these aerospace giants may shift.

Boeing Grapples with Soaring 787 Production Costs

Boeing’s 787 Dreamliner heavily depends on a globally sourced supply chain, which now leaves the aircraft vulnerable to new tariffs. About 35% of its components come from Japan, including crucial parts like the wings and fuselage. With the U.S. imposing a 24% import tariff on Japanese goods, Boeing now faces a significant spike in costs.

787 Cost Structure at a Glance:

• Pre-pandemic list prices:
  • 787-8: ~$239 million
  • 787-9: ~$292 million
  • 787-10: ~$338 million
• Typical sale prices: 50–60% of list value
• Estimated production cost per unit: $120–150 million
• Imported components by cost:
  • Japan: 35%
  • Italy: 10%
  • UK: 5%
  • Other countries (e.g., Korea, Germany): 10%
  • Total foreign-sourced: ~60%

Boeing now must absorb or pass on these increased input costs. These tariffs not only threaten profit margins but also force the company to reconsider supply chain strategies and pricing models.

Airbus Shifts Focus as Tariffs Threaten U.S. Deliveries

Airbus is preparing to adjust delivery plans if the U.S. trade barriers continue to tighten. CEO Guillaume Faury stated that the company could redirect aircraft originally bound for U.S. customers to other markets with strong demand.

“We have a large demand from the rest of the world, so [if] we face very significant difficulties to deliver to the U.S., we can also adapt by bringing forward deliveries to other customers which are very eager to get planes.”
— Guillaume Faury, Airbus CEO

Airbus invests approximately €15 billion each year with over 2,000 U.S.-based suppliers, making the United States its largest supplier market. However, escalating trade tensions could prompt Airbus to reassess this relationship and shift production focus if delivering to the U.S. becomes financially unviable.

What’s Next for Global Aviation?

New tariffs are actively reshaping the aviation landscape:

• Aircraft manufacturers are incurring higher production costs, potentially leading to price increases for airlines and passengers.
• Supply chain disruptions are delaying aircraft timelines and complicating operations.
• The global trade climate is altering strategic decisions, influencing where aircraft manufacturers prioritise orders and partnerships.

In today’s interconnected world, trade policy changes don’t just influence spreadsheets—they impact how the world flies.