Tariff Uncertainty Complicates Latin America’s Aftermarket Supply Chain

SANTIAGO—Shifting U.S. tariff policies are creating confusion and complexity for aftermarket stakeholders in the Latin America region. While the impact varies by country and business model, the Aviation Suppliers Association shared strategies during Aviation Week Network’s MRO Latin America conference here that companies can use to mitigate the effect of tariffs on the bottom line.

According to Liliana Bocanegra, operations director at Airline MRO Parts, tariffs are “making the situation very difficult, not just for airlines but for MROs, because [there is] uncertainty every single day. It makes it very difficult not just to plan but to operate because it’s complex.” During a panel about MRO best practices, she noted that it was crucial for suppliers to know that “it is very difficult to make our customers understand that this is changing every day and that we don’t have a clear [picture] of what is going on with the tariffs.”

Jacobo Mesta, chief growth officer at Soisa Aircraft Interiors, said the situation has caused an influx of interest in manufacturing aircraft parts in Mexico. While Soisa specializes in aircraft dress covers and cushions, the company is now receiving calls about manufacturing parts they do not currently focus on, such as air conditioning components, he added.

During his Latin America market forecast presentation, Alton Aviation MD Jonathan Berger highlighted how tariffs are driving business planning uncertainty and disrupting global supply chains.

“Since we implemented the tariffs . . . the U.S. dollar is down against all global currencies,” he said, noting that this could actually be good for some Latin American countries such as Argentina, which has seen its currency value go up 39%.

Berger shared figures suggesting that tariffs have negatively impacted North American cargo growth. In January 2025, the region’s cargo growth was up 5% compared with the rest of the world, which hovered around 3%, but this has dropped to around -2% to -3%. Meanwhile, the rest of the world’s cargo growth increased to 8%.

Regardless of whether companies are reevaluating where they ship parts, Jason Dickstein, general counsel for the Aviation Suppliers Association (ASA), pointed out that “there’s a tremendous amount of aviation trade coming from around the world and funneling its way through the U.S. and into Latin America,” with Miami serving as a hub for the region. This means tariffs “have an effect that maybe they shouldn’t have had on Latin America, because if you’re buying things that went through the U.S., then when the U.S. importer paid a tariff, they just increased the price associated with those goods.”

Dickstein said there are around 19,000 tariff codes, but that number “is constantly changing as the tariff codes get added or retired. Of those, roughly 500 have been designated as aircraft parts tariff codes.” This creates “a lot of choices and a lot of confusion about the right way to classify parts,” he added.

Further complicating matters, explained Dickstein, is that the U.S. has changed the way that aircraft parts are accepted, so “a small minority” of aircraft parts that were previously not subject to duties might now be subjected to additional duties based on where the part was originally produced. For example, aircraft parts manufactured in Brazil are now subject to an additional duty of 10%.

“Because aircraft parts used to be largely duty-free nine months ago,” many stakeholders did not pay attention to properly coding parts under tariff codes, Dickstein said. “Now, we’re seeing a lot more differences in the amount of duty that needs to be paid from one tariff code to the next, so we’re seeing a lot more enforcement actions over these tariff codes, which means it’s even more important for companies to get the assessment correct.”

Some companies have chosen to hire external customs brokers to handle importing parts into the U.S., but Dickstein said many of these brokers have struggled to keep up with rapid changes, resulting in costly mistakes that are passed down to customers. For example, he cited an instance where a customs broker wanted to charge tariffs on the metals content of an aviation part that was made of both aluminum and steel, but “most aircraft parts are outside the aluminum and steel lists,” with some exceptions, such as defense parts made from aluminum, insulation fittings or certain radar and electrical parts.

“This is something I’m seeing a lot of customs brokers making mistakes on. They’ll add 25% to the bill because they see that the part is made from aluminum and they’re not checking the tariff codes to see that [the part] is outside the scope of what’s actually charged the additional aluminum tariffs,” Dickstein said.

Companies are still in limbo as they await the U.S. Supreme Court’s decision on the legality of tariffs, which is expected soon. However, Dickstein said that even if the tariffs are ruled illegal, “the [U.S.] government has already started taking steps in order to do the next round of tariffs,” including conducting a Section 232 investigation into aircraft, aircraft parts, engines and engine parts. The ASA has filed formal comments opposing the Section 232 sanctions.

“If you have suppliers in the U.S. who are paying tariffs and it turns out those duties were illegal, then there is a strong likelihood that they’ll be able to seek reimbursement from the government,” either via filing for a correction to their entry or filing a protest after liquidation, Dickstein said.

Beyond this, Dickstein suggested that Latin American companies should have their U.S. repair station partners obtain a bond and bring parts into the country under Temporary Importation under Bond provisions, which apply to parts processed in the U.S., such as through MRO or manufacturing activities.

Parts coming from other countries can also be entered into a Foreign Trade Zone in the U.S. “Think of it as creating a little pocket of limbo area where parts come in, and even though they are physically in the U.S., they are not legally in the U.S.,” Dickstein said. “As long as they leave the U.S. again, no tariffs are due. It’s a great strategy for your U.S. partners to use to insulate you from those cost increases.”