Here’s What The Recent EU-US Trade Deal Means For Aviation

After months of tension, softening demand and creative tariff-skirting solutions, the European Union and United States came to a trade agreement last week. It has largely been regarded as a positive turn in the aviation industry.

The tariffs and trade deal involves goods and services across industries and is not exclusively limited to aviation. Most notably, it covers energy, steel, and agricultural sectors, to name a few. Reportedly, heavy lobbying from Delta Air Lines and GE Aerospace meant favorable agreement terms for aviation.

Aircraft & Parts Go Tariff-Free

The EU and US agreed to a zero-for-zero tariff regime on all aircraft and component parts. This has come as welcome news for the likes of Airbus and Boeing both of which would have suffered from US tariffs, including a reciprocal response on the other side of the Atlantic. Panic ensued after US President Donald Trump imposed a 25% tariff on imports from the EU in April. This has now been reduced to 15% with the added exemption for the aviation industry.

Worries were somewhat soothed in June at the 2025 International Paris Air Show, when United States Secretary of Transportation, Sean Duffy, revealed his preference for a zero-for-zero tariff regime on aviation. This week’s political agreement, as announced on July 27, is not legally binding and will require further discussion in the lead-up to its implementation. That said, it provides clarity and relief for an industry reliant on global cooperation.

However, the exemption for EU aircraft and component parts already came into force on August 1. In a release, the EU said that this provides “immediate tariff relief for key EU industries” and added that the two parties would continue to work to add more products to the list of exemptions.

Positive Reactions All Round

Companies and lobby groups on both sides of the Atlantic were relieved by the prospect of a trade deal exempting aviation. GE Aerospace and Delta Air Lines both supported the agreement. For his part, Delta CEO Ed Bastian said it would enable “growth of air travel as a key driver of economic expansion, innovation, and high-quality American jobs.”

GE Aerospace Chairman and CEO Larry Culp highlighted that the deal “recognizes the important role aerospace plays in powering economic growth, jobs, and innovation.” It’s no surprise that these two players are happy with the announcement, especially as they are said to have played a key role in lobbying President Trump.

European lobby group Airlines for Europe said that the consensus provides “long-term certainty” and avoids disrupted supply chains, increased operating costs, and delays in the rollout of newer, more efficient aircraft. It also warned that the US’ 15% tariffs on Europe for other industries would “damage competitiveness on both sides of the Atlantic.”

Tariff-Skirting Solutions

Tariffs on aircraft and components mean that in the case of an Airbus delivery to the United States, for instance, import taxes will be applied. This affects most Airbus aircraft deliveries to the United States, except those constructed at the company’s final assembly line in Mobile, Alabama. As I had analyzed previously, tit-for-tat tariffs between the US and Europe would have had a detrimental effect on both Airbus and Boeing. Analysts warn that Boeing might have even been the worst hit in this scenario.

Delta Air Lines famously came up with a creative solution to avoid paying the tariffs during the period they were in place this year. Instead of delivering an Airbus A350 directly to the United States, it routed it to Japan. So long as the aircraft continued to operate international flights, it would not need to pay the import tax. The company’s Chief said that it would “not be paying tariffs on any aircraft deliveries we take.”

In Europe, Ryanair took a similar stance. Group CEO Michael O’Leary said that the airline’s agreement with Boeing stipulates that the manufacturer should pay US tariffs. If needed, O’Leary suggested registering deliveries under its UK brand to skirt EU-related tariffs. The UK’s agreement with the US also exempts aircraft and components from tariffs.