Howmet Warns Trump Tariffs Could Halt Aircraft Orders

Howmet Warns Trump Tariffs Could Halt Aircraft Orders

Force Majeure Declaration Amid Rising Trade Tensions

Howmet Aerospace, a prominent supplier of metal components to Airbus and Boeing, has issued a warning to its customers that it may suspend certain shipments if the new U.S. tariffs announced by President Donald Trump come into effect. According to a letter reviewed by Reuters, the Pittsburgh-based company declared a force majeure event, a legal provision that allows firms to suspend contractual obligations when confronted with unforeseeable and unavoidable external circumstances. The letter states that Howmet “will be excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order.” The company declined to comment further on the letter.

This development arrives as the global jetliner industry, valued at approximately $150 billion, faces increasing pressure from U.S. tariffs on imported aluminum and steel. Additional duties on imports from other countries are also anticipated. President Trump cited trade deficits as a national emergency when announcing tariffs ranging from 10% to 50%, a move that has unsettled investors and raised concerns about a potential economic downturn.

Implications for the Aerospace Supply Chain

The letter, reportedly sent to multiple aerospace firms, represents the first known instance of a major supplier invoking force majeure in response to the new tariffs. While the declaration does not automatically halt deliveries, it signals Howmet’s potential inability to fulfill contracts if the tariffs significantly disrupt its operations. The company also expressed willingness to engage with customers to explore ways to mitigate the impact of the tariff executive order.

Industry sources suggest that if Howmet’s force majeure claim is accepted, it could trigger a broader ripple effect throughout the aerospace supply chain. Other companies might seek to pass on increased costs or adopt similar legal strategies to manage the financial strain. This potential disruption compounds existing challenges in the aerospace sector, which is already contending with supply chain difficulties and rising material costs.

Market reactions have been mixed, with Howmet’s stock and those of its competitors experiencing volatility as investors weigh the possible consequences. Some rival suppliers are reportedly considering strategic adjustments to counterbalance the tariffs and maintain operational stability.

Industry Response and Legal Considerations

Neither Boeing nor Airbus has responded to requests for comment regarding Howmet’s letter. Historically, aerospace companies have contested force majeure declarations, and the outcome in this case may hinge on whether the tariffs are deemed genuinely unforeseeable, especially given that President Trump had referenced such trade measures during his election campaign.

Howmet’s preemptive legal maneuver highlights the complex environment confronting aerospace manufacturers, who must navigate rapidly evolving trade policies and economic uncertainties. This rare invocation of force majeure could set a precedent within the industry, underscoring the broader implications of international trade tensions on global supply chains and the strategic responses they may necessitate.