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Embraer, the Brazilian aircraft manufacturer, has warned that punitive tariffs threatened by Donald Trump on imports from the country could add $9mn to the price of each plane bought by US airlines.
Francisco Gomes Neto, chief executive, said aircraft production might have to be slowed or stopped if US customers refused to pay the higher price, and that tariffs could delay his company’s purchase of up to $20bn worth of American-made parts and equipment over the next five years.
Embraer, the world’s largest civil aircraft manufacturer after Airbus and Boeing, is seen as one of the companies most exposed to Trump’s threat to impose a 50 per cent tariff on all Brazilian imports from August 1.
The US is the main market for the company where its E175 narrow-body aircraft, built in Brazil, is a mainstay for regional operators such as SkyWest. About 70 per cent of its executive jets are sold in the US.
Embraer also has a large manufacturing footprint in the US, notably in Melbourne, Florida where it assembles its Phenom business jets.
Neto said that even taking into account the large share of US parts on its planes, the cost of each aircraft exported to the country would jump as a result of the threatened tariffs.
“$9mn per aircraft is huge and we don’t believe the customers will agree to pay that tariff,” he said, adding that in such a scenario Embraer would “have to stop production”.
The overall impact on the planemaker, said Neto, could be as damaging as Covid-19. In 2020, when air travel ground to a halt, Embraer’s revenues fell more than 30 per cent from the previous year as production all but stopped, and it let go of hundreds of workers.
Shares in the dual-listed company, which had soared more than 30 per cent this year on the New York Stock Exchange, fell last week after news of Trump’s plan emerged. They closed at $49.30 on Friday, down 7.75 per cent on the week.
The “particular problem for Embraer is that the US is such a dominant part of the regional jet market,” said Nick Cunningham, analyst at Agency Partners, pointing out that North America accounted for 59 per cent of Embraer’s first-quarter revenues in 2025.
The threatened tariffs are also an issue for US carriers, which might not be able to secure new planes as other manufacturers do not have a comparable offering.
In March, Embraer’s E175 order backlog included 90 firm orders from American Airlines and 16 from SkyWest. The latter placed a new order in June for another 60 jets. The public list price for a E175 jet is just over $60mn, although airlines typically get reductions.
Neto said the company had managed to mitigate some of the impact of the baseline 10 per cent tariffs imposed by the US earlier this year, due to the jets’ using some US parts, allowing the planemaker to stick to its guidance for the financial year.
The aerospace industry has rushed to ease the impact of Trump’s trade war, with higher costs already filtering down through its integrated supply chains.
Apart from an 18-month period in which levies were applied on Boeing and Airbus aircraft as part of a dispute over subsidies, the sector has largely operated without tariff barriers since 1979.
Its supply chains span the globe, with companies importing parts for new aircraft from various regions. Boeing, which sources parts for some of its aircraft from Italy and Japan, already faces higher import costs.
Neto said he was pushing for a return to the tariff-free era for the aerospace industry, adding that he was hopeful a deal could be reached between Brazil and the US to ward off the higher levy.
Officials in the US “understand the importance of Embraer for the country”, he added.
However, the government of President Luiz Inácio Lula da Silva has so far refused to back down in the face of what it views as a politically motivated threat.
A letter from Trump, which he posted to his Truth Social platform earlier this month, criticised the criminal trial of former Brazilian president Jair Bolsonaro, who is charged with plotting a coup and Lula’s assassination after losing the election to him.