Just over a month has passed since the Trump administration eliminated tariffs on Japanese-made airplane parts, giving Japan a competitive edge over countries like those in Southeast Asia, where tariffs still apply. In response, Japanese manufacturers such as Nikkiso are reassessing their supply chains and investing in productivity improvements.
High levies may cause US airplane maker Boeing Co. to urge Japanese companies it buys parts from to shoulder some of the burden.
Japanese makers are responsible for about 35 pct of Boeing’s 787 aircraft. Mitsubishi Heavy Industries Ltd. manufactures the plane’s main wings, Kawasaki Heavy Industries Ltd. the forward fuselage, and Subaru Corp. the centre wing box.
IHI Corp. supplies engines, while Toray Industries Inc. provides carbon fibre. It is impossible for Boeing to produce aircraft without Japanese companies.
Japanese makers produce the parts in Japan, and the buyer, Boeing, pays tariffs for imports to the United States.
An additional levy may spur Boeing to reflect higher costs in the selling prices of aircraft, passing on the burden to airlines. Still, a Mitsubishi Heavy official mentioned a need to “think about the risk of suppliers being asked” to bear some of the costs.
Boeing is suffering chronic red ink due to quality issues and mass strikes stalling production. Trump’s effort to revive the U.S. aircraft industry through the additional tariff is expected to deal a further blow to the company through higher procurement costs.
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