Tariffs: another spanner in the B777F works?

I shared an image on LinkedIn recently, of a Boeing 787 Dreamliner, showing the international provenance of all its parts, along with the caption someone had added: “They say a picture is worth a thousand words. How are the tariffs going work?” When I then read that Boeing had communicated a positive order month in MAR25, including a further 11 Boeing 777F orders, bringing the total orders for the freighter variant to 400 (according to Cargo Facts), I asked myself how the APR25 tariffs will affect its production going forward? Because the Boeing 777F is just as international a product as the Boeing 787.

Meanwhile, those tariffs have been put on hold again – at least for the next three months, but they continue to loom and cause instability. Something the Boeing 777F program with its history of issues, really does not need in addition. Coming out of the pandemic where supply chain disruptions caused various component bottlenecks (not least an ongoing engine shortage), last year then saw a month-long strike in OCT-NOV24, where 33,000 IAM workers laid down their tools, halting assembly lines and reducing deliveries in NOV24 to just two 777Fs. Out-of-sequence assembly and parts cannibalization further exacerbated production problems, as did the communication that Boeing would be reducing its workforce by 10%.
The result? Delayed B777F deliveries leading to unexpected costs for Boeing and thus financially straining production resources, as well as a push-back for the launch of the B777-8F to 2028. Add to this, the end of the B767F production in 2027 plus ongoing component shortages, and B777F production continues to be under pressure.

Impact of Tariffs on Cost Structures
The last thing it needs, then, is the imposition of tariffs. Aside from flight decks, wings, tails, engine nacelles that are all produced in the United States (and where final assembly occurs), the construction of a B777F involves parts from several countries. Here are a few examples: Alenia in Italy manufactures parts of the fuselage, and the UK’s Bombardier Shorts supplies parts for the fuselage and other systems. Mitsubishi Heavy Industries in Japan, contributes to wing structures, whilst ASTA over in Australia, provides various structural components. Brazilian Embraer contributes to smaller components. South Korea’s Korean Air manufactures certain parts, and Singapore Aerospace provides additional systems. Last, but definitely not least, since it is the only country currently not spared from the tariffs reprieve, China’s AVIC Shenyang Commercial Aircraft (SACC) has in the past been a component provider for Boeing. In 2021, Global Times reported that “China has played an important role in Boeing, as more than 10,000 Boeing aircraft are equipped with world-class parts made in China, and one out of every four civilian aircraft produced by Boeing has been delivered to China.”

Fifth largest U.S. export
Worth mentioning at this point: According to Tradeimex, ‘Aircraft, Spacecraft, and Parts Thereof’ make up the fifth largest export group for the United States, amounting to a value of USD 30.92 billion in 2024. Boeing exports around 80% of its planes to airlines and leasing companies in over 150 of the world’s countries – among which China is a large contender – also for the B777F. How the currently escalating tariff tennis game between the two countries will pan out, remains to be seen.
Coming back to the aircraft’s production, however, it is clear that tariffs pose a serious threat to the B777F’s cost structures, since an estimated 60-70% of its components are sourced internationally, and that therefore exposes the production process to a vulnerability. Particularly in the case of retaliatory tariffs.

Aluminum and steel tariffs
One of the most pressing issues facing the 777F program is the imposition of 25% tariffs on Canadian and Mexican aluminum and steel, as these are important components for aircraft structures such as skins, landing gear, and aircraft engines. These parts undergo multiple cross-border processing stages during manufacturing, which amplifies the costs associated with the tariffs. Additionally, composite materials for the empennage and cabin floors are sourced from global suppliers, further complicating the supply chain. The consequence of these tariffs would be a significant increase in freighter prices

Rising Production Costs
Production costs for the program are already rising due to USD 2.6 billion in delays for 777X certification. These escalating costs could strain relationships with key freight carriers, such as Qatar Airways and Emirates, which operate 40% of the active 777F fleet. Rising costs could result in U.S.-built freighters becoming less competitive – and airlines operating older freighters will face higher maintenance costs, compounded by tariff-driven price increases for replacement parts.
The plan of action therefore would need to be to negotiate tariff exemptions or subsidies to mitigate cost increases. Whether Boeing can actually reduce its reliance on internationally produced parts, is questionable, since that would require production infrastructure on a large scale.

Long-term?
While there appears to be an optimistic outlook with regard to continued B777F orders (because many freighters in the industry are coming to the end of their lifespan), the Boeing 777F program definitely faces significant challenges from supply chain complexities, and production delays, and the tariffs will add to these. Boeing needs to negotiate favorable trade terms and work on streamlining its production to cushion the impact of these challenges and maintain strong demand for its freighters in the global market.