Business AviationEmbraer estimates US$360 million in tariffs on the US in 2025 alone
Normally reserved in political matters, Embraer has gone public to reveal the severity that the additional 50% tariffs on goods produced in Brazil promised by the Trump administration could have on its aircraft.
In a press conference on Tuesday, the company’s CEO, Francisco Gomes Neto, outlined a frightening scenario, with a brutal impact on its business in the US.
According to him, if the new tariff takes effect on August 1st, Embraer will face an additional cost of US$360 million in the remaining months of 2025 alone.
By 2030, the aircraft manufacturer estimates that the tariffs will exceed US$3.5 billion in costs. Without specifying the model, Gomes Neto projected an additional cost of US$9 million to the price of the company’s aircraft.
“It’s a very high cost. It’s unlikely any company will accept paying a tariff of that amount,” said the CEO.
Customers may cancel or postpone deliveries
The repercussions of the Trump administration’s new trade policy could be more far-reaching than the tariffs themselves. Aircraft like the E175 are almost exclusively sold in the US due to the scope clause, for which the model was tailored.
Without orders from the country’s major carriers, the E-Jets line would likely be discontinued, as there is little demand outside the US.
The business jet line has 70% of its market share in North America and is even partially assembled in Florida, US, leading Embraer to consider moving production there, a hypothesis that is ruled out in the case of the E175.
Given this situation, Embraer may see its customers postpone or even cancel agreements, as they will theoretically have to bear import tariffs.
Layoffs like in the COVID era
Another complicating factor is that the Brazilian government has instituted the Economic Reciprocity Law, which imposes tariffs equivalent to those on products imported from countries that start trade wars.
Embraer aircraft are supplied by suppliers in various parts of the world, especially the US, where sensitive items like engines are sourced.
Gomes Neto hopes the two countries will negotiate to find common ground that won’t disrupt trade between them. “We’ve had several meetings with high-level authorities in the United States to demonstrate Embraer’s contribution to the country,” he said.
Otherwise, Embraer may have to resort to large-scale layoffs, a situation only seen during the COVID-19 pandemic, to which the company’s CEO compared the current situation.
About the Author
Ricardo Meier
Creator of the website that started in 1996 as a magazine. He also writes on Brazilian websites AUTOO, MOTOO and MetrôCPTM.
