A&D: Initial Look at Tariff Impact

Matt Woodruff, CFA - Head of Aerospace & Defense/Transports, CreditSights
Arda Tirnakli - Analyst, Aerospace & Defense/Transports, CreditSights

EXECUTIVE SUMMARY
    • President Trump has announced tariffs of 25% on goods from Canada and Mexico and 10% on goods from China, with retaliatory measures anticipated. In the first eleven months of 2024, the US exported $10.6 billion worth of civilian aircraft, engines, equipment, and parts to Canada and Mexico. While aircraft purchase contracts typically include cost escalators tied to inflation, they don’t explicitly account for tariffs.
    • Currently, the impact of tariffs on Canada and Mexico appears more manageable compared to the automotive sector. Canada has a strong aerospace presence, including Pratt Canada small engine manufacturing, parts of Pratt & Whitney Large Commercial Engines, and Bell Commercial Helicopter operations, while Mexico also contributes to the industry. Companies are expected to disclose their estimated tariff impacts over time.
Would you like access to the full report?
Receive a complimentary copy of A&D: Initial Look at Tariff Impact

Our Products

CreditSights combines credit market research, covenant analysis and leveraged finance news into one site to help you Know More. Risk Better.

Markets Served

We’re proud to be the trusted resource for these credit research consumers:

BUY SIDE

From mutual funds, pensions and hedge funds to the world’s largest insurers, managers at these institutions are guided by our credit research

SELL SIDE

Financial intermediaries-the world’s broker-dealers, market makers and liquidity providers-rely on our credit insights each day

WEALTH

Brokers, financial advisors and private wealth managers entrusted with their clients’ assets leverage our intellectual capital when it comes to the credit markets