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What the US Tariff Surge Means for the Aerospace ER&D Sector
Tariffs shift aerospace focus from cost to resilience, with ER&D driving modular systems, digital tools, and supply chain agility.
New U.S. tariffs introduced in 2025 are expected to increase input-costs for aerospace manufacturers by up to $5 billion annually (KBRA Report), squeezing margins and ramping up supply chain uncertainty. Unlike automotive or consumer electronics, aerospace cannot pivot suppliers overnight. Every part, from avionics modules to sub-systems, must clear the rigors of FAA, EASA, or MIL-SPEC certification. This regulatory gravity means that tariffs are not just a matter of cost—they are a potential drag on program delivery.
Engineering Resilience, With Limits
For aerospace ER&D teams, the immediate shock is muted. Prototyping and design work operate at low volumes, well ahead of production runs. With 12–36 months between design and manufacturing, aerospace engineering teams have a buffer to reassess sourcing, redesign components if required, and negotiate with suppliers. Yet this window is not indefinite. As designs move closer to production, tariffs crystallize into real risks, and the cost of rework escalates. In a recent project, a critical electronic component was flagged early for tariff exposure. By involving the end customer upfront, the engineering team secured better commercial terms and shortened lead times, ensuring continuity. The lesson: aerospace engineering resilience is built through early, transparent collaboration across the value chain.
From Constraint to Innovation
Tariffs are also accelerating the adoption of digital tools. Digital twins and AI/ML are no longer buzzwords but practical levers that are modelling supply chain disruptions, testing alternative materials, or reconfiguring logistics. There are precedents to this kind of innovation under constraint. India’s LCA Tejas programme famously turned denial of foreign support into an indigenous capability, developing flight control laws from scratch and securing a strategic edge. Tariffs today are prompting aerospace companies to think with the same ingenuity and originality.
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