Embraer Faces Turbulence: Tariffs Threaten Aviation Giant's Revenue

Embraer, the Brazilian plane manufacturer, could face severe revenue losses due to a 50% U.S. tariff planned by President Donald Trump. The tariff is expected to impact Embraer's U.S. supplies and partners, potentially echoing the revenue impacts seen during the COVID-19 pandemic.

In a significant economic development, U.S. President Donald Trump's proposed 50% tariff on Brazilian imports could severely affect the revenue of Brazilian plane manufacturer Embraer. This caution comes from the company's CEO, Francisco Gomes Neto, who highlights potential impacts akin to those suffered during the COVID-19 pandemic, should the tariff be enacted.

This move threatens to stifle Embraer's core business with U.S. clients, who represent a large chunk of its market. U.S. customers account for 45% of Embraer's commercial airliner sales and 70% of its executive jet sales. Consequently, there's a looming risk of order cancellations and delivery delays, which could spell trouble not just for Embraer, but also for its U.S. suppliers.

Analysts predict that if implemented, the tariffs could drive the additional cost for Embraer's U.S. exports up by approximately $360 million this year, making it increasingly difficult for Embraer to maintain viable U.S. partnerships. Embraer's E175 models, essential to the U.S. regional aviation market, are particularly at risk.

(With inputs from agencies.)