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Home Read a ride Aerospace

Trump tariff threats shake Canadian Aerospace industry, threaten supply chains

David Ijaseun by David Ijaseun
January 27, 2025
in Aerospace, Premium
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Canadian aerospace suppliers are racing against time to protect their businesses as U.S. President Donald Trump threatens to impose 25% tariffs on imports from Canada and Mexico starting February 1. The proposed tariffs could disrupt supply chains, drive up costs, and jeopardize billions in cross-border trade.

Optima Aero, a commercial helicopter parts supplier based in Quebec, has already begun relocating inventory to the U.S. to mitigate potential damage. “A tariff on Canada would make it tough to keep that business,” said Toby Gauld, President of Optima Aero. The company generates $32 million annually, with 6% of its revenue at risk if tariffs take effect.

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Economic Stakes Are High

Canada exported C$12.8 billion ($8.91 billion) in aerospace and defense products to the U.S. in 2023, while importing C$10.2 billion. The two nations’ aerospace industries are deeply intertwined, with Canadian manufacturers producing critical components like engines, landing gear, and aluminum parts for U.S. giants such as Boeing and General Dynamics.

The Aerospace Industries Association highlights Canada as the U.S.’ top aerospace import partner and its third-largest export destination by dollar value. However, this robust partnership is now at risk.

“If tariffs are implemented, it will create fresh headaches for Boeing, its suppliers, and the broader aerospace ecosystem,” said Alex Krutz, managing director of aerospace advisory firm Patriot Industrial Partners.

Suppliers Scramble to Adapt

Across North America, aerospace suppliers are bracing for a financial hit. Optima Aero is not alone in its preparations; Pyrotek, a heat treatment specialist in Western Canada, has expressed grave concerns about potential disruptions. Pyrotek regularly ships aluminum parts to and from the U.S. for treatment, serving a largely American clientele.

“Tariffs would have an enormous effect,” said Pyrotek President Jim Matheson. “There’s no one who can build a plane alone from the ground up.”

In Montreal, Mitchell Aerospace sends sand castings to the U.S. for processing before shipping finished products globally. President Guillermo Alonso fears that tariffs will increase costs and complicate logistics.

For smaller suppliers like TNT Aerospace in Washington State, the financial pressure is even greater. Family-owned TNT is negotiating lower steel prices to cushion the blow but cannot afford to stockpile materials due to inventory costs. “It doesn’t take a large piece of steel to cost a lot,” said President Aaron Theisen.

Political and Global Implications

The tariff threat stems from Trump’s campaign promise to protect American industries. “Aircraft is an iconic American product,” said Warren Maruyama, a former general counsel for the U.S. trade representative. However, analysts warn that tariffs could backfire, sparking retaliatory measures from foreign governments targeting U.S.-made planes.

Canada has already hinted at retaliatory tariffs if Trump’s plans materialise. The aerospace sector, still recovering from pandemic-era disruptions, faces renewed uncertainty that could impact global operations and profitability.

Despite skepticism from some analysts, the industry remains on edge. “It would be incredibly complicated,” said Krutz, noting the sprawling, interdependent nature of aerospace supply chains.

As the February 1 deadline approaches, the stakes for North American aerospace companies—and the broader economy—could not be higher.

Read more on From Rockwell to Boeing: Could Kelly Ortberg be the next aerospace titan?

Tags: Canadian aerospacecommercial airlinesTariffs

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