MONTREAL, Jan 24 (Reuters): Canadian helicopter parts supplier Optima Aero is already moving inventory south of the border to minimize the risk from potential tariffs proposed by US President Donald Trump.
Optima, headquartered in Quebec, sends about $2 million worth of parts each year to Texas, where its local division provides maintenance services for local law enforcement and US border protection, a priority mission for Trump's administration.
"A tariff on Canada would make it tough to keep that business," said Optima President Toby Gauld, who estimates 6 per cent of the Montreal-area company's $32 million in annual revenue could be subject to tariffs.
Trump is threatening 25 per cent duties on imports from Canada and Mexico starting on February 1.
From repositioning parts to stocking up on materials such as steel and lobbying for tariff exemptions, aerospace suppliers are scrambling to limit tariff risk to their bottom lines. The tariffs, if implemented, could raise costs for already-stressed suppliers and their planemaking customers, such as US-based Boeing (BA.N), opens new tab.
GE Aerospace (GE.N), opens new tab CEO Larry Culp said on Thursday the company is doing contingency planning and has been in frequent contact with the Trump administration.
Some aerospace and defense executives have proactively sought tariff exemptions from the administration, according to one aerospace industry source and one source in Trump's transition team.
Reuters contacted nine aerospace suppliers in Canada and the United States, seven of which said they could be harmed if tariffs are imposed, adding that they have limited options without passing costs on to customers.
The owners are so revolted by the topping that they're charging customers $123 for a Hawaiian.
The White House was not immediately available for comment.
The aerospace industry consists of a sprawling network of global suppliers, making targeted tariffs difficult to implement without major disruptions to plane and helicopter makers.
Canada is the US' top import country and third-largest export country for aerospace by dollar value, according to the Aerospace Industries Association. Canadian manufacturers produce engines for General Dynamics Corp's (GD.N), opens new tab Gulfstream and Textron (TXT.N), opens new tab, as well as landing gear for Boeing and Airbus (AIR.PA), opens new tab.
Boeing and suppliers Honeywell (HON.O), opens new tab and Pratt Canada parent RTX (RTX.N), opens new tab declined comment. Textron's CEO and Airbus' Canadian division said they are waiting for tariff specifics.
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