Embraer reconsiders $500m US expansion amid shifting import tariffs

Embraer is reassessing its planned US$500 million expansion in the United States following changes in US import tariffs on Brazilian aerospace products announced earlier this year.

The US imposed a 10% tariff in April, raised it to 50% in July, and then reverted to 10% soon after. This volatility has affected Embraer’s competitiveness, particularly in the US regional aviation segment, which remains its largest market.

“The investments announced recently already had been decided before the announcement of the tariffs. But, if nothing changes, we will probably review these investments,” said Antonio Garcia, Embraer’s CFO, to the Brazilian press.

Embraer disclosed a US$70 million investment plan for its Texas facility, as part of the broader five-year commitment. The Melbourne, Florida unit is also slated for new capital injections.

“Our regional aviation arm has the US as its main market. The end customer pays the tariff, and we are losing competitiveness. All our competitors have already returned to zero tariffs,” Garcia added.

An additional $500 million investment could follow if the KC-390 is selected by the US Air Force. Embraer’s leadership is in ongoing discussions with US and Brazilian authorities to seek a resolution to the tariff dispute.

“It had an effect, but it is still a nuisance,” Garcia commented regarding the tariff changes.

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Ricardo Meier

Creator of the website that started in 1996 as a magazine. He also writes on Brazilian websites AUTOO, MOTOO and MetrôCPTM.

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