Tariff Clauses in Aircraft Sales Contracts
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Incoterms and Delivery Terms
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Contracts typically use Incoterms (like FOB, CIF, or DDP) to define responsibilities for transport, risk, and customs duties (including tariffs).
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If the contract uses FOB (Free on Board) or similar, the buyer (Chinese airline) is usually responsible for import duties and tariffs.
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If it’s DDP (Delivered Duty Paid), Boeing would bear the cost of any tariffs.
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Force Majeure and Trade Barriers
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Some contracts include Force Majeure clauses that cover “governmental actions,” including sudden imposition of tariffs or trade restrictions.
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However, invoking this clause requires proving the impact was truly unforeseeable and beyond the party's control.
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Change in Law / Hardship Clauses
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Advanced contracts may include change-in-law provisions that trigger renegotiation or price adjustments if tariffs are imposed after signing.
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This allows flexibility if the cost structure changes significantly due to government actions.
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Price Adjustment Clauses
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Some contracts have price escalation or adjustment mechanisms tied to duties or taxes.
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Boeing might specify that if a tariff is imposed, the price is adjusted or the buyer must absorb the cost.
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Termination or Suspension Rights
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In more contentious situations, the buyer may have a right to suspend acceptance or terminate the contract if delivery becomes commercially unreasonable due to tariffs.
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This is often negotiated case-by-case.
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