Trump tariffs weigh heavily on aviation as Pilatus pauses US aircraft deliveries
August 11, 2025
Pilatus has temporarily stopped all aircraft deliveries to the US following 39% tariffs imposed on Swiss products. Around 40% of Pilatus’ annual deliveries of PC-12 and PC-24 models are to US customers.
The planemaker said the new duties added “massive additional costs” and created a serious competitive disadvantage compared with rivals based in the US and Europe.
Pilatus is now reallocating aircraft bound for the US to customers in Asia-Pacific, Latin America, Europe, and the Middle East. However, the company acknowledges that this move involves logistical and market challenges.
It is accelerating plans to establish a US-based assembly facility in Sarasota, Florida, which will enable local supply and circumvent tariffs. Pilatus already has a plant in Colorado completing final assembly work for PC-12s and PC-24s.
Pilatus stated its financial position remains stable, despite the tariffs, with a backlog of orders worth CHF 2 billion (about $2.48 billion).
However, with US deliveries paused, less work in the production pipeline could begin affecting its cashflow. Instead of resorting immediately to layoffs, Pilatus is looking at two softer ways to reduce labour costs.
Swiss Kurzarbeit (short-time work) lets employees work fewer hours with partial lost wage compensation from the government. Pilatus sees that this, coupled with natural attrition, can avoid any redundancies.
Trade negotiations between Switzerland and the United States may also ease the situation.
Pilatus is not the only aviation manufacturer dealing with the effects of recent US trade policy.
Embraer dodged 50% tariffs but still faces a 10% duty on goods sold to the US
Brazilian planemaker Embraer has also faced headwinds from tariffs, though it dodged the worst.
Embraer’s chief executive warned that the consequences of the 50% tariffs imposed on Brazilian goods would have been comparable to the revenue losses experienced during the pandemic. He estimated that such a tariff would add as much as $9 million to the cost of each aircraft, making US exports economically unviable.
The company ultimately received an exemption, but it still faces a 10% import duty on aircraft sold into the US. Embraer has maintained its delivery and revenue forecasts for 2025, saying the lower tariff so far has had a limited impact.
The Brazilian planemaker pledged to invest heavily in the US to enhance its position. That includes a proposed assembly line and plans to purchase up to $21 billion in American products by 2030.
RTX faces up to $500 million in higher costs from tariffs on key raw materials
US aerospace suppliers have also been affected by tariffs. Pratt & Whitney’s parent company, RTX, has reported substantial costs resulting from 50% tariffs on aluminium and steel.
RTX Chief Financial Officer Neil Mitchill said tariffs have already cost the company $125 million and could cost half a billion by the end of the year. These increased raw material costs threaten to squeeze margins across its civil and defence programs.
“We have not seen any major impact on our demand signals,” RTX Chief Financial Officer Neil Mitchill told Reuters. “But ultimately over the long term, we do expect to see some pressure on pricing and other costs in businesses as we look to recoup this headwind.”
US aerospace groups have expressed opposition to tariffs
The US aerospace sector has been vocal in its opposition to increased tariffs. Manufacturers and airlines argue that steep duties will disrupt complex global supply chains and undermine the US aviation industry’s competitiveness.
This March, representatives from 15 US aviation organisations sent a letter to the heads of the US departments of commerce and transportation and US Trade Representative Jamieson Greer, making their case for an exemption from tariffs.
“The aviation supply chain involves tens of thousands of suppliers from all over the globe which provide parts, platforms, and systems that require safety approval for use and installation, all of which may not be easily replaced or substituted,” they wrote.
“Given this reality, it is essential that both government and industry work together to minimise cost and availability disruptions in the aviation supply chain, which in many cases cannot be easily or quickly addressed.”
Other organisations have raised red flags over potential increases in passenger fares and even safety itself as a result of the new taxes.
Pilatus’ decision to pause deliveries illustrates how easily tariffs can disrupt the commercial strategies of aerospace companies. Production plans, investment decisions, and long-term market strategies remain vulnerable to the uncertainty surrounding US trade policy.
