The aerospace sector captured President Trump’s attention during his first presidential address and made its way into the Joint Address to Congress. His administration appeared to prioritize space-related matters, similar to the focus during Trump’s initial term, where significant resources were dedicated to boosting the competitiveness of the space industry.
Regrettably, the continually changing tariff framework is likely to have adverse effects. It raises the expenses of constructing rockets and satellites in the United States, restricts the industry’s access to essential inputs and materials, and promotes the boycott of American products and services abroad.
Initially, the space sector is primarily dependent on domestic production, yet with the existing emphasis on government contracts, it relies on sourcing many raw materials and key components from allied nations.
Aluminum and steel are subjected to tariffs but are extensively utilized within the space sector. Rising costs or shortages directly impact the industry’s capacity to deliver spacecraft, rockets, satellites, and other products on schedule and within budget. Canada is a major supplier, providing over half of the aluminum consumed in the U.S.
This is relevant for NASA endeavors, just as it is for Elon Musk’s SpaceX, which utilizes aluminum and steel for engines, propellant tanks, rocket frames, and more.
The circumstances are expected to deteriorate with imminent tariffs exceeding 25% on semiconductor chips from Japan, Korea, and Taiwan. These potential tariffs could have a direct impact that is presently under consideration, implementation, or delay.
The full extent of retaliatory measures from other nations remains to be seen. These could include tariffs on American satellites, boycotts of U.S. launch services, and disqualification of U.S. firms from procurement processes, among others.
The U.S. government has continually fostered the growth of the commercial space sector for many years, with a central aspect of its business model targeting customers beyond government contracts. American launch and re-entry companies dominated the global launch market with at least 40 countries utilizing aerospace firms in 2024 alone, resulting in $125 billion in exports from the previous year.
Unfortunately, due to Trump’s actions, the international community is pushing back against American businesses and enhancing their capabilities while moving toward reduced reliance on U.S. technology.
While the long lead times for developing foreign capabilities means their impact will become evident over time, there’s no doubt that this trend poses a significant long-term threat to the soft power of American space leadership, as well as national and economic security.
For instance, the U.S. space sector has already been harmed by export prohibitions on germanium imposed by China last year. This material is particularly suited for challenging conditions and is used in solar panels for space applications. While other countries also export germanium, China is the largest supplier, making access to this material more costly and challenging.
The 2024 export ban was a response to U.S. restrictions on semiconductor-related exports. Germanium is highly valuable in outer-space applications but is also known for its critical role in the semiconductor sector.
New tariffs affecting not only China but also longtime partners in the space sector such as Japan, Canada, the European Union, and the United Kingdom are significantly worsening the situation. It is concerning to think about the types of retaliatory actions that may arise and how they will impact the U.S. space sector.
Even worse, there is no valid justification for these tariffs. As their repercussions extend from this week’s financial marketplace conflicts with America’s top-tier manufacturing and technology industries, it is crucial for President Trump to reconsider.
Mary Guenther is the Director of Space Policy at the Progressive Policy Institute.
