Delta’s Clever Strategy To Dodge Tariffs On Airbus Jets

When Delta Air Lines CEO Ed Bastian said that Delta would not pay tariffs on any new Airbus jets…he wasn’t kidding.

How Delta Air Lines Is Outsmarting Airbus Tariffs

Aviation insider JonNYC noticed that a new Delta A350-900, registration number N528DN, is heading from the Airbus factory in Toulouse (TLS) to Tokyo Narita (NRT). That seems strange, doesn’t it?

But One Mile At A Time notes what is really going on:

• By first flying the plane to somewhere outside of the EU before flying it to the US, the plane is no longer considered new
• The airline will then exclusively use the plane for international flights, and therefore, the plane is never actually imported to the United States

The result: no tariffs.

Clever…maybe even ingenious, no? But not a new strategy. For Delta used this very strategy in 2019–during the first Trump administration–to skirt tariffs.

Back then, a Delta spokesperson explained:

“We have made the decision not to import any new aircraft from Europe while these tariffs are in effect. Instead, we have opted to use the new aircraft exclusively for international service, which does not require importation.”

A 10% tariff is currently set on Airbus jets made outside the USA. Those whose final assembly is completed in the USA (like the Airbus A220 manufactured in Mobile, Alabama) are not subject to the tariff, but all widebody Airbus jets are assembled outside the United States.

The Trump administration defines a new aircraft as one that has “no time in service or hours in flight other than for production testing.” By flying the A350 to Narita where it will then operate a flight to the USA, the jet will no longer be new, though Delta will not be able to officially import it (yet).

I always thought Delta could just set up a holding company in Europe or Asia and then import and operate aircraft via that company…but this alternative seems quite shrewd.

CONCLUSION

Delta is taking a delivery of a new Airbus A350-900 tomorrow and intends to avoid paying any tariffs on it through a scheme it has already used in the past to avoid such levies.

Thus, when Ed Basian said:

Obviously, in this environment, we are going to work very closely with Airbus, which is the only airline we’ve got deliveries coming from for the balance of this year. And they’ve been a great partner. We’ll do our very best to see what we have to do to minimize tariffs. But the one thing that you need to know we are very clear on is that we will not be paying tariffs on any aircraft deliveries we take.

…he was serious.

> Read More: Delta Air Lines CEO: We Will Not Pay Tariffs On New Airbus Deliveries

And yet it seems that this blatantly violates the spirit of the new trade policy, even if it does not violate the letter of the law. Will an administration that is fixated on “leveling the playing field” in a bid to increase US manufacturing allow this little ploy to proceed? We’ll see…I’m not certain.