Aerospace firms scour contracts over tariffs after supplier challenge

Planemakers, airlines and suppliers are combing through billions of dollars worth of contracts to check their exposure to tariffs after a major U.S. supplier sparked debate over who should pay for an emerging trade war, industry sources said on Monday. Reuters reported on Friday that U.S. supplier Howmet Aerospace had declared a "force majeure event," effectively claiming the right to halt shipments if they were affected by U.S. President Donald Trump's tariffs. Howmet makes engine parts, fuselage fasteners and other components. Analysts said Howmet's rare and unexpected declaration that it can legally avoid contract obligations due to unavoidable circumstances will amplify debate about who should bear the cost for chronic disruption to parts supplies, including new tariffs. So far, the answer has been passengers, as higher costs ripple along an $800b-plus supply chain from parts to aircraft and airlines, and ultimately to higher fares. Trump's 20% tariffs on European Union products including Airbus (AIR.PA), opens new tab planes, and likely EU retaliation against U.S.-based Boeing (BA.N), opens new tab, may put that to the test. "Howmet has made a chess move, declaring force majeure and threatening to halt shipments. We all know it takes just one nut or bolt to stop the ... supply chain,” Jefferies analyst Sheila Kahyaoglu wrote. "This ultimately is an effort to pass on rising input costs in areas not already protected … In our view, the potential to stop shipments creates leverage for Howmet, but also is pitted against its customers' willingness to cave."<br/>