U.S. clients account for 45 percent of Embraer’s commercial airline aircraft exports and 70 percent of its executive jets.

On Tuesday, Francisco Gomes Neto, the CEO of Brazilian aircraft manufacturer Embraer, warned that a 50 percent U.S. tariff on Brazilian goods would raise the cost of each Embraer aircraft by nearly US$9 million.

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Gomes Neto, noted that the steep tax — effective on Aug. 1 — threatens to make the firm’s U.S. exports “unfeasible,” with disruptions rivaling those of the COVID-19 pandemic. He called the measure a potential “near-embargo” that could cripple trade ties.

The Embraer president emphasized that the U.S. is the company’s primary market, and if the 50 percent tariff takes effect, there is no immediate alternative market that can compensate for the lost demand.

According to company data, U.S. clients account for 45 percent of its commercial airline aircraft exports and 70 percent of its executive jets. The tariff could destabilize Embraer’s Brazilian and U.S. manufacturing units and its American supply chain, he added.

Embraer employs approximately 3,000 people across its U.S. subsidiaries, including manufacturing and service centers, after 45 years of operation in the country.

Gomes Neto explained that the 50 percent tariff would increase the production cost of each aircraft by an additional US$ 8.96 million, resulting in an annual increase of US$358 for the manufacturer.

Considering Embraer’s growth plans through 2030, the potential impact of the tariff could reach about US$3.6 billion. Despite the pressure, the CEO expressed “optimism” about ongoing Brazil-U.S. negotiations.

teleSUR/ JF

Source: Xinhua

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