Embraer’s shares fired more than 10% on Wednesday (30) with the inclusion of the aeronautical sector in the exception list of 40% surcharge on Brazilian products announced by US President Donald Trump earlier this month.
In confirming the extra fare, the US government announced that a series of items that will not be subject to collection. The list of more than 700 exceptions – such as orange juice, fuels and vehicles – was released with the executive order signed by the US leader.
According to the text, all civil (non -military) aircraft, their engines, parts, subsets and flight simulators are exempt from the additional rate. Aeronautical articles include from tubes and hoses to electrical systems, tires and metal structures.
Possible impact
Embraer investors were excited by the news, as tariffs could raise the prices of exported aircraft. According to company estimates, there would be an additional cost of $ 50 million per plane. As this scenario has not been confirmed, American companies should not cancel orders already made or postpone deliveries.
Unlike other sectors, Air Force sales contracts often establish that airlines arise with import fares of the destination country. Embraer could not absorb the extra cost – an impact of about $ 20 billion by 2030.
“Airplane is not commodity. Our biggest market is the US, there is no way to reposition this to other markets,” said company president Francisco Gomes Neto, at a press conference this month. According to him, the impacts of the tariff would be as severe as the fall in revenue and reduction of the workforce experienced during the Covid-19 pandemic.
Company positioning
In a statement, Embraer says the US government’s decision to exclude additional tariff civil aircraft confirms the positive impact and strategic importance of the company for Brazilian and American economies. With the measure, exports remain rates by 10%.
“We continue to believe and firmly defend the return to the zero fare rule to the global aerospace industry. More importantly, we support continuous dialogue between Brazilian and American governments and remain confident in a positive result for both countries,” the company said.
Beatriz Hadler under the supervision of Thiago San.
