Tariffs are estimated to cost more than $500 million aerospace this year.
During his 1979 meeting with President Donald Trump, GE Aerospace CEO Larry Culp advocates for a reestablishment of a tariff-free regime for the aerospace industry, based on the 1979 civil aircraft trade agreement.
In an interview with news outlet Reuters on Tuesday, Culp added that the company’s position was “understood” by the administration, and that the zero-work regime helped the US aerospace industry enjoy a $75 billion annual trade surplus.
“I argued that it was good and good for the country,” Culp told Reuters.
Trump’s trade war has created the greatest uncertainty for the aerospace industry since the Covid-19 pandemic. It also led to a breakdown of the industry’s decades-old tax-free status, with aircraft delivery being placed in scope.
Uncertainty has made some GE Aerospace customers struggling to accurately predict their business. Meanwhile, Howmet Aerospace, one of the company’s well-known suppliers, warns that freight could cease if it is affected by tariffs.
Culp said the company has not seen the disruption in delivery from Howmet. The Pittsburgh-based supplier is currently working on a new high-pressure turbine blade for the Leap 1A engine, produced by GE Aerospace, a joint venture with French Saffron SA.
“This lamp has been doing very well so far in 2025,” he said.
GE Aerospace is tackling supply chain challenges, with engine delivery declining over the past year. Last week, Airbus said it faced a challenge in delivering engines as CFM is “slightly behind the curve.”
Culp said the company is “well aligned” with the needs of European planmakers this year, but added that tariffs have created supply chain risks.
Customs fees
Tariffs are estimated to cost more than $500 million aerospace this year. The company makes more use of foreign trade zones and available trade programs, including the shortcomings of its obligation to mitigate its impact. It also employs cost control and tariff surcharges to protect margins.
Culp’s comments come as he puts pressure on another aerospace giant these days. Last week, China asked its airlines based there to cancel orders for planes made by US Boeing amid the looming trade war.
Trade-inducing economic uncertainty also strains travel needs. Softening travel spending increases the risk that airlines can begin postponing engine orders.
Culp said other airlines will intervene if other airlines decide to stop deliveries. “There are a lot of people who line up and replace me,” he said.