The US has taught the tariff rope with Brazil again. Embraer has a lot to lose, and its customers too

If you live in Europe, fly in a Embraer is not the most common. But the truth is that these Brazilian planes are more present than they seem. In airports such as London City, Where only a few models can operate, these jets dominate the track. Even in Spain his footprint was remarkable: Air Europa had several E195 in its regional fleet until the beginning of 2023.

Embraer is not a minor actor. It is one of the world’s largest manufacturer in the world and its e-hes-especially the E175– They hold a good part of regional traffic in the US. Airlines such as American, Skywest and other regional United Express operators have clearly opted for them. With Boeing in low hoursEmbraer is emerging as an emerging candidate for the select group of the great manufacturers.

A tariff triggers uncertainty

President Donald Trump has threatened to apply A 50 % tariff To Brazilian products as of August 1, an unprecedented offensive in relations between the two countries. In parallel, Brazil already mentions a mirror answercovered by a recent reciprocity law. Although there is still no confirmation about which sectors they would be exempt.

With a large part of Embraer’s orders aimed at the US market – where almost 95 % of firm orders from E175 come from airlines such as American, Skywest and other United Express operators -, the new measure threatens to significantly increase their products significantly.

Not only will the final prices of the jets be affected, but the cost of the Imported components from the United Statesessential for manufacturing, it could also be affected if Brazil decides to apply, in retaliation, an equivalent rate.

Among those components are enginesCF34 manufactured by General Electricthe airplane system Honeywell Primus Epicas well as landing trains and actuators supplied, mostly, by Collins Aerospace (USA) and Liebherr (Europe). An essential part of each aircraft that, if more expensive, would also impact the production costs of the aircraft destined for other markets.

This dual effect could have broad spectrum consequences. On the one hand, airlines could be forced to Reconsider your purchase strategies If the price jump translates into higher operational costs. On the other, if the manufacturing cost is increased, Embraer’s global competitiveness would be compromised, even in regions where its position is solid.

As Flightglobal collectsEmbraer has indicated that he is evaluating the impact of this measure on its operations and has been active in the dialogue with the authorities to try to restore the exemption of the import tax that has historically favored the Brazilian aeronautical industry. However, queen uncertainty.

This tariff is part of a Trump communications series to leaders of more than twenty countries, with warnings that rates can modify “according to the relationship.” The lack of regulatory clarity leaves manufacturers such as Embraer – and suppliers, airlines and passengers— In a difficult situation to anticipate.

Images | Dave Montiverdi | Marcelx42 (CC by-SA 4.0) | Samuel Costa Melo

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