2 weeks Ago By Vince Bzdek
On the eve of the 40th annual Space Symposium at The Broadmoor, a shadow hangs in the stratosphere. What will President Donald Trump’s aggressive tariffs mean for the space industry, the global supply chain to the stars, and the international connections so many businesses make in Colorado Springs and come to rely on to market their space wares? Tariffs on aerospace imports could have a dramatic impact on the U.S.
economy, given the sector’s size and global interconnectivity, analyst Jerrold Lundquist forecast in Forbes. Aerospace manufacturing, which employs over 2 million people, is America’s second-largest export category, generating $126 billion annually. And Colorado has the second-biggest space economy in the country.
“Colorado is a national leader in aerospace and the industry continues growing here in our state, but Trump’s action threatens the many businesses, jobs and livelihoods in Colorado that power it,” said Lt. Gov. Dianne Primavera, chair of the Colorado Space Coalition.
Experts expect higher costs for critical materials, supply chain disruptions, mission delays and pressure on American manufacturers to make everything domestically. Shares of UFO, an exchange-traded fund holding an international mix of 30 space companies, have fallen 12% since the tariff announcement. Denver-based Palantir Technologies, which does data analytics for Space Force and NORAD, lost $22.
5 billion in market value in one day on Friday. The tariffs also are likely to be a blow to the international cooperation that is the hallmark of the space industry. The Space Symposium, in fact, bills itself as “the premier event uniting global space professionals from all sectors.
” Ten thousand people from more than 40 countries will be represented at the symposium, which will also feature 24 military chiefs from around the world. Those numbers indicate how much the space industry is dependent on international collaboration. Spacecraft are often “built by collaborators from several different countries, launch from another, undergo operational management by teams based in other countries, and then connect to the ground and provide a service for end-users in yet more territories,” according to Space News.
Just how international is the space industry? U.S. space firms are among the country’s most globally integrated manufacturers on earth.
Lockheed Martin has more than 350 facilities around the world, including 14,000 employees in Denver, Boulder, Littleton and Colorado Springs. Safran Electronics & Defense, a global equipment supplier for defense and space that will open a manufacturing facility in Parker to produce electric propulsion thrusters, has 14,000 employees in 27 countries. Lockheed is taking a wait-and-see approach on the tariffs for now.
“We are carefully evaluating all tariff announcements from the U.S. government and will work with our employees, customers and suppliers to address any potential impacts, within the U.
S. and for our global partners,” said Dana Casey, spokesperson for Lockheed. Most U.
S. space companies rely on a global supply chain where parts frequently cross international borders, complicating tariff enforcement. Canada exports 56% of its aerospace products to the U.
S., including satellites and component parts. New tariff rate: 25%.
Mexico makes many components that are integrated into satellites and ground stations built in the United States, and supplies aerospace giant Boeing, which has a significant presence in Colorado, with over $1 billion in components annually. Tariff rate: 25%. Taiwan and South Korea are among the leading technology suppliers in the world for the space industry.
New tariffs: 32% on Taiwan, 25% on South Korea. The U.S.
has important rocket and air defense projects ongoing with Norway and Israel, yet Israel was just slapped with a 17% tariff and Norway 15%. The U.S.
space industry depends heavily on rare earth minerals produced in China, including neodymium, dysprosium and high-purity graphite, for electric propulsion systems, sensors and other satellite components, according to Space News. China was just hit by a new tariff of 34% on top of an earlier tariff of 20%, for a total tariff rate of 54%. China announced retaliatory tariffs of 34% on U.
S. imports to China Friday. Europe’s Thales Alenia Space is a major supplier of pressurized modules to the United States and is building three of them for U.
S. company Axiom Space’s upcoming commercial space station. EU tariff: 20%.
The aerospace industry is scrambling to secure exemptions from these new tariffs, making the case that U.S. aerospace manufacturing is already trading at a surplus, meaning exports exceed imports.
Since erasing trade deficits is the ultimate goal, why punish a sector that has already met that goal? Ultimately, the hope is the tariffs will drive an increase in domestic space production, creating jobs and growth in places like Colorado and California with leading space economies. But that takes time and investment. And Colorado and the U.
S. don’t have the workforce now to meet the current need in the aerospace and defense sectors, Dak Hardwicki, vice president of international affairs at the Aerospace Industries Association, told a meeting of American and European defense executives Thursday. Where will it get future workforce if the U.
S. does ramp up space manufacturing? “President Trump’s reckless tariffs are costing Coloradans and their families more money, while also threatening critical industries like agriculture, manufacturing, aerospace and more,” Primavera said Friday. And space companies could just shift production to countries that are exempted from the tariffs, undermining the “Made in USA” hopes.
“The reality is, if our allies can’t buy American products, they’ll buy from elsewhere or build their own,” Primavera added. “Colorado will continue doing all we can to support Coloradans and these key industries, but Governor [Jared] Polis and I strongly urge the president to focus on expanding wealth and prosperity, not destroying it.” Trump’s memo on Thursday did make an important point about space defense capabilities.
It said persistent trade deficits have “rendered our defense-industrial base dependent on foreign adversaries,” which is true. The Pentagon has spent decades building a global web of suppliers, some of whom are in countries that could hold that supply chain hostage, delaying American-made weapons production. It would make sense for the defense industry to minimize those risks by bringing more of that production back to the U.
S., including to Colorado. There’s a collateral impact from these tariffs, as well.
An April report by several U.S. government space agencies called for more collaboration among international partners to bolster supply chains for satellites, launch infrastructure and advanced communications.
The Space Symposium itself is an icon of global cooperation. But the administration’s tariffs are aimed at just the opposite, building walls that will disrupt international cooperation. Just last week, for example, Canadian Prime Minister Mark Carney said that Canada’s old relationship with the United States, “based on deepening integration of our economies and tight security and military cooperation, is over.
” The sour relations with Canada may actually doom the world’s only bi-national command, headquartered at NORAD in Colorado Springs. NORAD is the military branch that keeps an eye on all things in space. Everything NORAD does is “interwoven” with Canada, so the command would have to “fundamentally change” how it conducts air defense and maritime warning, Gen.
Gregory Guillot, head of NORAD, told lawmakers during a House Armed Services Committee hearing Tuesday. And Ontario has already canceled its Starlink satellite contract with Elon Musk in response to the tariffs. And then there’s Europe.
Trump has called the European Union a bloc formed largely to “screw” the United States. And facing 20% tariffs, many European leaders believe the security and economic partnership between Europe and the U.S.
that has lasted 80 years is coming to an end. As a result, European countries are expected to bring their checkbooks to the symposium, spending big on satellites and other space tech to bolster their own defenses to counteract America’s pullback. “I think a number of countries see this certainly as the end of the trans-Atlantic relationship as we’ve known it, which is anchored on long-term stable U.
S. security guarantees, a strong security and defense partnership, and significant trade flows across the Atlantic,” Georgina Wright, a senior fellow at the German Marshall Fund, told The Washington Post. “I think there is a sense that that has come to an end.
” That could mean an end to America’s role as the world’s north star guiding it to greater cooperation and bigger things. Columnist David Brooks recently got at the larger implications of Trump’s walling off instinct for the American psyche itself: “This mean world vibe not only reduces contact between peoples but also squelches the venturesomeness that has been America’s best defining trait.” That venturesomeness has seen its greatest expression in our desire to explore space, to literally reach for the stars.
If these tariffs and their crouching mentality sap our questing spirit and willingness to shoot for the moon, America could soon find itself utterly lost in space..
