MONTREAL, Jan 24 (Reuters) - Canadian helicopter parts supplier Optima Aero is already relocating inventory to the United States to mitigate potential tariffs proposed by U.S. President.
Based in Quebec, Optima sends approximately $2 million worth of parts annually to Texas, where its local branch offers maintenance services for law enforcement and border protection agencies, crucial under the Trump administration.
Tony Gault, President of Optima, expressed concerns stating, A tariff on Canada would make it tough to maintain that business, estimating that tariffs could impact 6% of the company's $32 million revenue.
President Trump plans to implement tariffs on imports from Canada and Mexico starting on Feb. 1.
Aerospace suppliers are making various preparations to offset potential tariff impacts, from relocating parts to securing materials and lobbying for exemptions. GE Aerospace CEO Larry Culp mentioned ongoing contingency planning and communication with the Trump administration.
Several aerospace suppliers in Canada and the United States fear negative consequences if tariffs are enforced, foreseeing challenges without passing costs on to customers.
The U.S. Aerospace Industries Association reports that Canada ranks as the top import country and third-largest export country for aerospace products by value, playing a significant role in the industry's global network of suppliers.
Canada exported C$12.8 billion ($8.91 billion) of aerospace and defense-related products to the U.S. in 2023, with retaliatory tariffs in place as a precaution.
Industry experts speculate on the possibility of blanket tariffs on Canada by Trump, highlighting potential economic repercussions. Many doubt whether the aerospace sector will be a primary target for tariffs, given the complexities involved.
Mexico also faces tariff threats from the U.S., impacting its burgeoning aerospace industry hubs in Queretaro and Chihuahua, luring major suppliers like Honeywell.
Tariffs on aerospace parts, currently duty-free under global agreements, could pose challenges for Boeing and its supply chain, burdened by pandemic-related issues and reduced output.
Small aerospace suppliers are particularly vulnerable to financial strains, limiting their ability to cope with tariff impacts.
Overall, industry players are bracing for uncertain times, with trade tensions potentially reshaping the aerospace landscape.