How Trump’s trade war could hit Canada’s aerospace sector

Escalating U.S. tariffs and Canadian retaliatory duties could raise costs on items from aircraft components to engine repairs, according to aerospace trade groups in Canada.

Escalating U.S. tariffs and Canadian retaliatory duties could raise costs on items from aircraft components to engine repairs, according to aerospace trade groups in Canada, as a fresh round of the U.S.-led trade war looms.

U.S. President Donald Trump’s administration is set to enact reciprocal tariffs on trading partners on April 2, widening a dispute that has already slapped 25 per cent duties on steel and aluminum imports to the U.S., sparking retaliation from Canada.

While reports suggest some sector-specific goods would be excluded, counterstrikes are already being weighed, with Canada consulting domestic industries on proposed retaliatory tariffs on C$125 billion ($87.31 billion) of U.S. goods.

Melanie Lussier, president of the trade group Aero Montreal, said Canada’s proposed counter tariffs cover certain U.S.-made items like sensors that would be difficult to source elsewhere, since parts must be certified to meet safety requirements.

Aerospace companies are set to discuss the prospect of being squeezed by duties from both countries at an industry supply chain summit on Tuesday in Montreal.

“It could be really catastrophic, a rise in costs, loss of productivity, a loss of competitiveness,” Lussier told Reuters in an interview last week. “In the end, everyone will pay more, both Americans and Canadians and it’s the passengers who will suffer.”

Lussier said Aero Montreal is not seeking an exemption to proposed Canadian counter duties but would like to see some U.S. products removed from the list.

Aerospace contributed nearly C$29 billion to Canadian GDP in 2023.