This paper presents the impacts of manufacturing tolerances on a 1 MW slotless permanent magnet synchronous motor used in an aircraft propulsion system. The motor was designed using multiphysics analysis of electromagnetics, mechanical structure and thermal analysis to obtain a high torque density. It has several governing characteristics, including a Halbach permanent magnet arrangement, slotless stator windings, an outer rotor, lower reactance and a high current density. Since the current density of this design is high, the existence of circulating currents should be considered for safe operation under different levels of manufacturing tolerances. In particular, the low reactance of the motor and the slotless structure greatly contribute to increase the circulating current. Therefore, this paper analyzes various factors affecting the circulating current such as eccentricity and imbalanced windings. Finally, an analytical model is used to calculate magnetic and electric loading, and non-linear finite element analysis are applied and compared to obtain the machine performance.