What it would mean for American customers of a Canadian AMO needing parts or aircraft inspections, overhauls and repairs.
Typically, U.S. articles repaired abroad and then returned to the United States (or articles for which a duty was previously paid that are subsequently sent to Canada for repair) are charged a duty based on the added value associated with the repair. This added value is typically equal to the cost of the repair (unless it is a no-charge repair, in which case it is based on the fair market value fo the repair). This is covered under chapter 98 tariff subheadings like 9802.00.40 (for warranty repairs) or 9802.00.50 (for non-warranty repairs). The goods would be subject to a basic duty based on the repair value times the rate that applies to the underlying good. For example, if the repair cost was $20,000 and the underlying aircraft part was subject to heading 8807, then the rate of duty would be zero percent so the duty would be zero dollars. Under the new tariffs, though, if the repair cost was $20,000 and the tariff is at a 25% rate, then the U.S. importer to whom the repaired part is returned (from Canada) would need to pay an import duty of $5,000. This requirement appears to be suspended with the remainder of the Canadian tariff, but if the Canadian tariffs go into effect in March, then the application to repairs will still apply.