Civil Aviation Largely Exempt From New US Tariffs After Supreme Court IEEPA Ruling, but Risks Remain

The U.S. Supreme Court held on February 20, 2026, that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. The Court affirmed the decisions of the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit and remanded the case to the lower courts.

U.S. Customs and Border Protection (CBP) has since established a process for importers of record to seek refunds of IEEPA tariffs previously paid, and has already issued thousands of refunds where entries were not yet fully liquidated.

Historically, most civil aircraft, engines and parts entered the U.S. duty-free under the 1979 Agreement on Trade in Civil Aircraft, the "zero-for-zero" framework. In early 2025 the U.S. began imposing substantial IEEPA tariffs on foreign-made aircraft, engines and parts, which interrupted supply chains and affected contracts that often did not clearly allocate responsibility for new duties among manufacturers, lessors, lessees, buyers, sellers and maintenance providers.

Tariffs imposed or considered under other authorities have largely exempted civil aviation. New Section 301 duties of 10 percent or 12.5 percent imposed over the summer exclude civil aviation, as do new U.S. tariffs on Canadian products and Canada's counter-tariffs. A Section 232 proclamation on commercial aircraft and jet engines, issued July 9 following a Department of Commerce investigation begun in May 2025, imposed no tariffs at this time. It did find that certain foreign practices harm U.S. commercial aircraft manufacturing and called for negotiations with trading partners.

The exemptions cover only civil aircraft, engines and parts, so ancillary equipment such as ground-support equipment, test equipment and engine stands may still face tariffs, and some vendors add surcharges. Tariffs on steel, aluminum and other raw materials may raise costs even for exempt products.

Items classified under a Harmonized Tariff Schedule number not associated with civil aviation require the customs broker to claim the civil aircraft special program indicator "C" under General Note 6 to secure duty-free treatment. The president on September 7 threatened to ba…

Whether tariffs apply depends on whether an aircraft, engine or part is actually entered into U.S. customs territory as an import. They may apply when importing non-U.S. aircraft or engines for sale or lease, reimporting after foreign repairs or upgrades, returning aircraft for long-term storage, importing for a pre-purchase inspection, or temporarily importing for repair. They generally do not apply to aircraft on routine international passenger or cargo flights or to aircraft or engines exported from the U.S.

The 2025 episode showed how a tariff authority outside the zero-for-zero framework can reach aircraft, engines and parts and disrupt contracts that never assigned responsibility for new duties. With IEEPA tariffs struck down, the exposure that remains is narrower and more technical: it turns on how an item is classified, whether it counts as civil aviation equipment, and whether it physically enters U.S. customs territory.

For lessors, lessees, maintenance providers and buyers, that moves the cost question from a blanket rate to the details of each movement, such as a foreign repair, a storage return or a pre-purchase inspection. Contracts that allocate duty responsibility explicitly are better placed than those written on the assumption of duty-free entry.

The Section 232 proclamation of July 9 is the clearest pending marker. It imposed no tariffs but called for negotiations with trading partners, so any later change to that position would be the next point at which civil aircraft treatment could shift. The refund process for previously paid IEEPA duties is the other open item, and CBP's handling of fully liquidated entries is where that outcome will be settled.