Get Ready To Pay The Price Of Tariffs: GE Is Already Passing Costs To Customers

GE Aerospace Inc. GE is passing along higher prices to customers after U.S. trade tariffs created a $500 million cost burden, meaning airlines, and eventually passengers, will soon feel the heat.

Speaking from New Delhi at the International Air Transport Association's annual meeting, chief executive officer Larry Culp told Bloomberg that the world's largest aircraft engine maker is no longer able to shield customers from the financial impact of trade restrictions introduced under President Donald Trump's policies.

"We will be taking cost actions and passing along some of that residual," Culp said.

Is GE Already Seeing The Tariff Impact?

"Very much so," Culp said when asked whether the tariffs are affecting business now. The company has seen rising expenses and is adjusting its pricing strategy to preserve margins.

"We're managing the best we can, mitigating where we can through those supply-chain improvements but also through the cost and price actions," he said.

Tariff-Free Trade Helped Build US Aerospace

For decades, the global aerospace industry benefited from the 1979 Civil Aviation Agreement, which allowed for duty-free trade among key nations.

Culp said that the framework helped U.S. companies like GE and Boeing Co. BA build a $75 billion annual trade surplus in aviation. But that advantage is eroding under new trade barriers.

"We've been advocating for a return to where we were on the heels of that 1979 civil aviation agreement," he said.

The U.S. has already signed a trade deal with the U.K., and more negotiations are underway.

"I think June will be an important month," Culp added, as more agreements could shape the future cost landscape for aerospace exports.

Production Pressure Grows As Airbus And Boeing Ramp Up

GE is working to keep pace with increasing production from both Airbus SE and Boeing Co., who are planning record monthly output levels.

"Be it with Airbus, be it with Boeing, they are effectively sold out through the rest of this decade," Culp said.

GE holds a $170 billion backlog and expects to build more engines in the second half of 2025 and in 2026 than in the first half of this year.

Culp said parts received from key suppliers in April and May rose double-digits compared to the first quarter, a sign that the company's supply chain efforts are starting to pay off.

GE is also a major supplier to the U.S. Department of Defense, powering two-thirds of the U.S. combat aircraft and helicopters. Culp said the company remains focused on long-term military contracts and advanced engine development as defense spending increases.

When asked about growing concern over technology exports to China, Culp said GE has followed strict government procedures for years and is prepared for tighter controls if they come.

"We welcome the scrutiny," he said.

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