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Airbus signs VietJet contract as hope for tariff-free air travel grows at the Air Show

Airbus and VietJet, a budget airline, struck a deal for up to 150 single aisle jets on the second day of the Paris Airshow. The U.S. Transportation Secretary Sean Duffy gave a boost to industry hopes that tariff-free trade would return.

Duffy stated that he would like to see the civil aviation return to the 1979 zero-tariff agreement. This is one of the most clear signs to date that the Trump Administration might be in favour of such a move.

Duffy said that, while the White House is aware that the U.S. has a large aerospace export market, they are also facing a complicated tariff situation.

The 10% tariffs imposed by U.S. president Donald Trump on almost all aircraft and parts imports is a major headache for a sector that already faces supply chain issues and has been hit with new turbulence following the deadly Air India crash last week and the conflict in Middle East.

Early in May, the U.S. Commerce Department began an "Section 232", national security investigation, into the imports of commercial airplanes, jet engines, and parts. This could be the basis for higher tariffs.

Airline companies, planemakers, and other U.S. trade partners have lobbied Trump to reinstate the tariff-free regime of the Civil Aircraft Agreement from 1979.

Airbus announced on the second day of the airshow that it had signed an agreement with VietJet for the purchase of 100 A321neo aircraft, and the option of purchasing up to another 50 in the future. The agreement confirms an earlier report.

Cirium Ascend estimates that a deal for 150 A321neos might be worth $9.4 billion.

Airbus announced a number of deals at the largest aviation fair in the world.

Boeing, the U.S. competitor, is expected to put on a subdued performance as it concentrates on the investigation into the fatal crash last week of an Air India Boeing 787-8 and after it made huge deals during Trump’s recent Middle East tour.

Leonardo's Stefano Pontecorvo, the group's chairperson for the defence sector, said that the Italian company had acquired a European cybersecurity firm to enhance its position in a field considered increasingly important by new combat systems.

He refused to identify the company and said that the deal will be announced shortly. (Reporting from Joe Brock, Tim Hepher and Giulia Segreti. Mark Potter is the editor.

(source: Reuters)