LeBlanc Says Canada-U.S. Talks Continue on Protecting Aerospace Sector Amid Trump Trade Fight

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Canada’s aerospace industry has emerged as one of the clearest examples of how difficult it is to separate Canadian and American economic interests during an escalating trade fight. Canada-U.S. Trade Minister Dominic LeBlanc says discussions with American officials are continuing, while stressing that protecting aerospace matters across the country.

His comments come after U.S. President Donald Trump stepped back from threats against Bombardier, the Montreal-based business jet manufacturer with thousands of employees in the United States. The reversal provides some immediate relief, but it does not eliminate the larger uncertainty surrounding the Canada-U.S. economic relationship. With tariffs already affecting numerous industries and formal trade negotiations having broken down earlier this year, Ottawa is trying to prevent aerospace — one of Canada’s most export-driven and technologically advanced industries — from becoming another major front in the dispute.

Why LeBlanc’s Message Matters Now

LeBlanc’s latest comments offer reassurance without suggesting that the broader dispute is close to resolution. The minister responsible for Canada-U.S. trade said Canadian officials continue to speak with their American counterparts and expressed confidence that the two countries will eventually reach an arrangement that serves the Canadian economy. When specifically asked about Trump’s recent Bombardier comments, LeBlanc emphasized the importance of protecting aerospace across Canada. That distinction matters. Ottawa is not treating the Bombardier controversy simply as a disagreement involving one Quebec manufacturer; it is viewing the issue through the much larger network of manufacturers, maintenance companies, engineers and specialized suppliers connected to Canadian aviation.

At the same time, there is still no announced timetable for a comprehensive settlement. High-level negotiations broke down in August after Canada rejected U.S. demands that Ottawa considered unacceptable. Contact between officials has continued since then, however. That leaves aerospace in an unusual position: exposed to the political volatility surrounding the wider trade relationship while still benefiting from decades of cross-border commercial integration that both countries have strong incentives to preserve.

Bombardier Became the Flashpoint

Bombardier became the most visible aerospace target in September when Trump threatened to prevent the Canadian manufacturer from selling aircraft in the United States unless it shifted production south of the border. That was a serious threat for a company whose U.S. customers account for roughly half of its sales. Yet the political calculation changed once attention turned to Bombardier’s own American footprint. The company employs approximately 3,500 people across the United States, including around 1,500 employees in Wichita, Kansas, an important centre for business aviation.

Trump subsequently changed course during a visit to Kansas, saying he did not intend to hurt Bombardier or the workers connected to its operations there. Kansas lawmakers had urged the White House to consider the local economic consequences of targeting the company. Bombardier shares climbed roughly 4% after the shift in tone. For Canadian officials, the episode demonstrated something important: measures aimed at punishing a Canadian aerospace company can quickly become measures that threaten American jobs as well. In aerospace, national borders rarely line up neatly with production networks.

Aerospace Is Too Large to Treat as Collateral Damage

The numbers explain why Ottawa is emphasizing the sector so strongly. According to the latest industry assessment prepared by Innovation, Science and Economic Development Canada and the Aerospace Industries Association of Canada, aerospace contributed approximately $33.1 billion to Canadian GDP in 2025 and supported about 218,700 jobs. Aerospace companies also spent more than $1.8 billion on research and development during the year, leaving the industry as Canada’s most research-intensive manufacturing sector.

Its international reach is equally significant. Canadian aerospace manufacturing exported approximately $28.2 billion worth of products in 2025 to more than 170 countries, while more than 70% of manufacturing revenue was tied to exports. Canada also remained among the world’s five leading countries in important categories such as civil aircraft, aircraft engines and flight simulators. These are not easily replaced activities. Aerospace factories depend on highly trained engineers, machinists, technicians and certification specialists, often working with technologies developed over decades. Losing production because of a temporary trade confrontation can therefore have consequences well beyond a single order, especially when companies are deciding where their next aircraft program or research investment will be located.

The Border Runs Through the Industry

Bombardier’s U.S. operations illustrate why aerospace does not fit neatly into a conventional Canada-versus-America trade narrative. The company’s presence in Wichita traces back decades, including its acquisition of Learjet in 1990. It has continued investing in the American market, including a $50-million Wichita investment and a new service centre in Fort Wayne, Indiana. Even while Trump was threatening to restrict its access to U.S. customers, Bombardier said it was attempting to fill hundreds of American positions.

Other aerospace companies operate in similarly interconnected networks. Airbus, for example, reported spending more than $2.2 billion on its Canadian operations and supply chain in 2025 and works with around 1,000 Canadian suppliers, more than half of them small and medium-sized businesses. Aircraft assembled in one country may contain engines, avionics, structures, software or components developed elsewhere before crossing the border again for completion, maintenance or delivery. A tariff imposed at one stage can therefore increase costs several steps down the chain. For workers on either side of the border, the distinction between a “Canadian” and “American” aerospace product can become surprisingly difficult to make.

The Dispute Has Already Tested Aviation Rules

The current Bombardier confrontation was not the first time aerospace became entangled in the Trump administration’s tensions with Canada. Earlier in 2026, Trump criticized delays in Canadian certification of Gulfstream’s G700 and G800 business jets. He threatened retaliatory measures that included potentially decertifying Canadian-built Bombardier aircraft in the United States and imposing a 50% tariff on Canadian aircraft. Transport Canada later approved the Gulfstream models, saying certification followed the normal aviation safety process rather than political pressure.

The episode raised concerns because aircraft certification is fundamentally a safety function. Regulators normally evaluate airworthiness through technical standards, testing and coordination with foreign aviation authorities rather than trade negotiations. Turning certification into a bargaining tool could create uncertainty for manufacturers and operators on both sides of the border. The Bombardier dispute revived some of those fears months later, even though the threatened U.S. restrictions were never fully implemented. Trump’s subsequent retreat has reduced the immediate danger, but Canadian policymakers now have a clear example of how quickly an industrial disagreement can spill into regulatory questions that were historically kept separate from day-to-day trade politics.

Long-Standing Trade Rules Offer Some Protection

One reason aerospace has so far avoided the full force of the tariff war is that civil aircraft occupy a special place in international trade. Canada and the United States are parties to the Agreement on Trade in Civil Aircraft, a framework that entered into force in 1980 and eliminates import duties on civil aircraft, engines and many related parts and components. The agreement does not cover military aircraft, but it has helped create an unusually integrated international market for commercial aviation products.

That system remains relevant today. U.S. federal procurement rules recognize Canada as a participant in the civil aircraft agreement, and Reuters reported in September that aerospace was not included in the latest U.S. retaliatory measures affecting Canada. Bombardier aircraft also continued to reach U.S. customers despite Trump’s threats. Those protections are valuable, but recent events show that they cannot eliminate political risk entirely. Presidents retain powerful trade and regulatory tools, while government decisions can affect certification, procurement and market access even when ordinary customs duties are zero. Ottawa’s challenge is therefore not merely preserving one tariff exemption. It is maintaining the wider rules and regulatory cooperation that allow aerospace companies to plan investments years in advance.

Supply Chains Magnify Any Tariff Shock

The Canadian aerospace industry’s strength also creates vulnerability because so much of its business depends on international supply chains. More than half of Canadian aerospace manufacturing exports are related to supply-chain activity rather than finished products. A factory may produce landing-gear components, engine parts, avionics or specialized structures that are incorporated into an aircraft assembled elsewhere. That means a disruption involving even a relatively narrow category of components can spread through several manufacturers.

For smaller suppliers, uncertainty can be especially difficult. Large aerospace companies usually have greater financial capacity to absorb temporary cost increases or relocate certain purchases. A specialized supplier employing dozens or hundreds of workers may depend heavily on one aircraft program or one major customer. Switching markets is not as simple as finding another buyer because aviation components frequently require lengthy certification and qualification processes. This is why Canadian governments have increasingly described supply-chain resilience as a strategic issue. Ontario, for example, announced additional support for aerospace and defence suppliers in 2026, while federal policy has placed growing emphasis on domestic industrial capabilities. Preventing another tariff front is therefore partly about protecting the smaller businesses behind the household aerospace names.

Ottawa Is Keeping the Door Open

Canada’s approach since the August breakdown has combined retaliation with continued communication. After the United States imposed 50% tariffs on $27.6 billion worth of Canadian goods, Ottawa announced matching countermeasures on an equivalent value of U.S. imports, with rates of 15%, 25% or 50% depending on the product. The targeted sectors include steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. Aerospace, notably, has not been at the centre of those countermeasures.

Even after formal negotiations stopped, LeBlanc has maintained contact with senior American officials. He previously said he had continued speaking with U.S. Trade Representative Jamieson Greer and occasionally with Commerce Secretary Howard Lutnick. The distinction between formal negotiations and continuing conversations may sound technical, but it keeps diplomatic channels available when political conditions shift. Trump’s Bombardier reversal illustrates why that can matter. An issue that appeared confrontational in September looked considerably different after its effect on Kansas employment gained attention. For Ottawa, preserving those connections provides an opportunity to resolve specific sector problems even when a sweeping Canada-U.S. trade agreement remains out of reach.

The Wider Trade Fight Is Still Hurting Confidence

Aerospace may have escaped the most damaging tariffs so far, but Canadian companies are still operating within an economy affected by the broader conflict. The Bank of Canada’s latest business survey found that corporate sentiment weakened after the August collapse of Canada-U.S. negotiations and the introduction of additional tariffs and counter-tariffs. Export expectations softened, while hiring intentions remained restrained. Roughly 340 business leaders participated in the September survey, providing a snapshot of how uncertainty is influencing investment decisions.

The experience of other Canadian industries offers a warning. U.S. steel tariffs reached 50%, and Canadian steel shipments to the American market subsequently fell sharply. Companies have attempted to replace some lost U.S. demand with Canadian projects, but the adjustment has involved government support, new purchasing strategies and employment pressure. Aerospace companies will be watching those developments closely. Aircraft programs involve enormous upfront investments and planning horizons measured in years rather than months. Even without a new aerospace tariff, uncertainty over future market access can affect where companies expand factories, place suppliers or develop new technologies. Protecting the sector therefore requires more than preventing an immediate duty; it requires restoring enough predictability for companies to continue investing.

What Canada Is Watching Next

The next phase will unfold alongside uncertainty surrounding the Canada-United States-Mexico Agreement. During the required July 1, 2026 joint review, Washington declined to renew the agreement in its existing form. That did not terminate CUSMA. The pact remains in force and, without a future agreement to extend it, can continue until 2036 while the countries conduct further reviews. Canada has said it remains committed to renewal while defending its interests in separate discussions over strategic sectors.

For aerospace, the most important signal may be whether the recent Bombardier episode remains an isolated confrontation or becomes a model for resolving other disputes. Trump’s retreat showed that integrated employment and investment can create powerful incentives for compromise. A Canadian manufacturer employing 1,500 people in Kansas is considerably harder to treat as a purely foreign competitor. LeBlanc’s insistence that Canada and the United States are still talking reflects that reality. The trade relationship has become more contentious and less predictable, but the aerospace industry is also a reminder of how much both countries have built together — and how costly it could become if those connections are pulled apart.

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