Trump threatens 50% tariff on Canadian aircraft amid Gulfstream dispute
Trade escalation targets Bombardier over certification delays for General Dynamics' business jets
President Donald Trump threatened to impose a 50% tariff on all Canadian aircraft imports and decertify Canadian-made planes on Thursday, escalating trade tensions over a dispute involving General Dynamics' Gulfstream business jets.
The tariff threat specifically targets Bombardier's Global Express aircraft and other Canadian-manufactured planes, retaliation for Canada's alleged refusal to certify Gulfstream's G500, G600, G700, and G800 models for operation in Canadian airspace. Trump accused Canada of "wrongfully, illegally, and steadfastly refused" to certify these business jets, effectively prohibiting their sale north of the border despite certifications from the U.S. Federal Aviation Administration and European Union Aviation Safety Agency.
The move sends ripples through the North American aerospace sector, where cross-border supply chains are deeply integrated. Thousands of Canadian-built aircraft, including regional jets, helicopters, and Airbus A220s manufactured in Quebec, are currently in service across the United States, according to FlightGlobal analysis.
Bombardier shares declined in Thursday trading following the announcement. The Canadian aircraft manufacturer, which employs more than 3,000 workers in the United States, acknowledged Trump's statement and said it is in contact with the Canadian government. The company emphasized that its aircraft, facilities, and technicians are fully certified to FAA standards.
General Dynamics, which owns Gulfstream Aerospace, is grappling with significant commercial implications from the certification impasse. The company's aerospace segment concluded 2025 with a robust $21.8 billion backlog and delivered 158 Gulfstream jets last year. The G800, which received FAA certification in April 2025, and the G700 are particularly important growth drivers, with management projecting approximately 160 deliveries in 2026.
Transport Canada officials have maintained that their review process involves thorough paperwork examination rather than an outright refusal, though the agency has yet to grant full certification for the four Gulfstream models. The dispute echoes the previous Trump administration's trade battle over Bombardier's CSeries aircraft, where the U.S. Commerce Department initially imposed duties that were later reversed by the U.S. International Trade Commission.
The aerospace sector's complex cross-border dependencies mean ripple effects could extend beyond Bombardier. Companies like Honeywell, which supplies avionics and systems across both Canadian and U.S. aircraft manufacturers, face supply chain uncertainty. General Dynamics currently trades at approximately $350 per share, while Honeywell shares are hovering near $229.
Industry analysts are watching for whether Canada will move to resolve the Gulfstream certification standoff and whether Trump will proceed with implementing the tariff threat. The broader question for investors remains whether this escalation marks the beginning of sustained trade tensions in the aerospace sector or a targeted negotiation tactic aimed at resolving the specific certification dispute.