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Delta warns that tariffs may force the airline to stop purchasing foreign-made aircraft

Delta Air Lines has warned that tariffs imposed by the Trump administration on imported planes and parts may force it to stop purchasing foreign-made aircraft and cancel flights that serve 10 million passengers a year.

The Atlanta-based carrier's comments were made in an unreported filing by the U.S. Commerce Department late Tuesday, in response to an investigation into national security that was recently launched and could result in additional tariffs.

Delta said that if potential tariffs are not adjusted in time, they could threaten the U.S. aircraft manufacturing industry and hinder its ability to buy aircraft made domestically or overseas.

The airline stated that it will take delivery of 47 Airbus aircraft in 2023-2024, which are manufactured in Canada and France.

Delta stated that if tariffs forced Delta to cancel these deliveries, it would have prevented the airline from operating flights for 10 million passengers a year. It said that a "similar impact" could be expected in the future if new tariffs for national security are introduced.

Delta Airlines said that it would be forced to cancel contracts already in place and re-evaluate contracts currently under negotiation.

After President Donald Trump announced the new duties in April, nearly all planes and aircraft parts imported by the industry will be subject to 10% tariffs. A new national security duty would increase that.

Delta announced in April that it would defer orders for aircraft that were subject to tariffs. It was not clear what tariff rate would cause it to cancel its orders. The airlines and manufacturers argue that the sector should not be subject to tariffs.

The Commerce Department launched an investigation last month called Section 232 to examine the risks imported goods pose to U.S. security. This could be used to justify higher tariffs for imported parts, engines and planes.

Howard Lutnick, Commerce Secretary, said on Wednesday that the department will complete its review before the end of the month and then discuss the results with Trump.

Aerospace and airline industry has said that new tariffs for imported commercial aircraft, engines and parts may put the safety of air travel and supply chains at risk or have other unintended effects.

Airlines and manufacturers are lobbying Trump for a return to the tariff-free regime of the Civil Aircraft Agreement from 1979, where the U.S. sector had a $75 billion trade surplus each year.

In separate comments, the U.S. Chamber of Commerce urged Trump to refrain from imposing additional tariffs on aerospace products. They said that they would "weaken U.S. manufacturers."

Last year, 135 millions U.S. airline travelers traveled on regional aircraft.

The chamber stated that "while the United States does not have domestic assembly of regional planes, imported regional aircraft all feature significant amounts of U.S. Content," Tariffs on this production are not justified by national security or commercial interests.

Business Roundtable, an association of U.S. CEOs who are major players in the aerospace industry, warned that tariffs would lead to retaliatory actions, "which could significantly disrupt the U.S. Aerospace Industry, which is heavily dependent on foreign clients, and ultimately undermine the competitiveness U.S. products." (Reporting and editing by Cynthia Osterdy; Cynthia Shepardson).

(source: Reuters)