As 60% of the Boeing 787 components come from abroad, we estimate the price increase due to new tariffs

The Boeing 787 is produced using a complex global supply chain, with critical components sourced from various countries, including Japan, Italy, and the UK. A significant portion of the aircraft's parts, around 60% by cost, is imported, with Japan supplying approximately 35% of the aircraft. The introduction of new tariffs on these imported parts, such as a 24% tariff on components from Japan, will raise production costs for Boeing significantly. Industry estimates suggest that the production cost of a Boeing 787 ranges between $120 million and $150 million. With potential tariffs, if a 10% tariff were applied to all imported aerospace components, it could increase direct production costs, leading Boeing to potentially raise aircraft prices. However, due to competitive pressures, Boeing may choose to absorb some of these costs, resulting in price increases for customers ranging between $5 million to $10 million per aircraft.

In the transportation sector, the reliance on international supply chains highlights the fragility and interconnectedness of global manufacturing. Any disruptions, such as tariffs, natural disasters, or geopolitical tensions can lead to increased costs and delays in production. This situation emphasizes the need for companies like Boeing to develop more resilient supply chains, possibly by diversifying their sourcing strategies or investing in domestic manufacturing capabilities to mitigate the risks associated with international dependencies.