Donald Trump, the President of the United States, continues to pursue a policy of increased tariffs on imported products. Amidst a developing 'tariff war', pauses, and rapidly changing policies, it is difficult to foresee exactly what values these tariffs will eventually take. At the time of writing, however, China faces tariffs of at least 125%, with other countries facing tariffs of at least 10%.
There's no denying that the US is a leading player in the global space economy: the OECD's Space Economy in Figures 2023 report found that the US was responsible for 36% of space-related patent applications worldwide from 2016-2020. The effects of increasing tariffs on goods imported into the US are therefore likely to ripple through space industries worldwide.
Specifically, space companies are now anticipating disruptions to supply chains and delays in production, as foreign companies may choose to move away from US products. As US companies adapt and other countries respond with counter-tariffs, importing components from the US, who are currently a huge supplier, could become expensive. In the worst case, these challenges may influence investors and impact the recent rapid growth of the global space economy.
From a European perspective, industry experts suggest that the space market may therefore move to lower its dependence on US products, which could mean increased costs and delays for ongoing projects. But it's not all doom and gloom: this may ultimately encourage growth within the European space industry, as an increased reliance on 'homegrown' products would provide more opportunities for European businesses, and the industry trends towards more diverse international partnerships.
If you have an interest in how an effective intellectual property strategy could strengthen your own space technology business, please don't hesitate to reach out to our Space Technology team.
The tariffs could hurt American companies by prompting foreign customers who would normally buy U.S. products to choose suppliers elsewhere. But perhaps more challenging will be the difficulty of tapping into the U.S. market from the outside.
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