Embraer: Tariffs Not Denting U.S. Bizjet Sales

Sales of Embraer’s business jets in the U.S. have not been dented by the tariffs imposed by President Trump on products imported from Brazil, according to Embraer Executive Jets president and CEO Michael Amalfitano. Speaking at an investors’ day event at the New York Stock Exchange on Tuesday, he expressed optimism that Brazil’s aerospace sector might win a full exemption from the current 10% tariff rate for aircraft and their components.

Amalfitano noted that under the 1979 Agreement on Trade in Civil Aircraft there have been no tariffs on aerospace until President Trump’s “Liberation Day” announcement on April 2. “That is where we’re going to go back to as an industry. The industry is very committed to that, to go back to zero-tariff regime,” he stated.

“Our government affairs folks have been in Washington regularly to discuss this with the administration in the United States as well as in Brasilia to discuss the same with Brazil officials,” Amalfitano continued. “I think they have heard Embraer’s story as an individual company. They’ve heard the story as it relates to Embraer and the entire ecosystem of aerospace, and we’re confident that we will return to a zero tariff.”

Tariff ‘Plague’ Doesn’t Deter Buyers

In the interim, however, Embraer has to deal with what Amalfitano said has been “plaguing” all products imported from Brazil. Nonetheless, he stressed that the 10% tariff on executive jets isn’t inhibiting buyers in the U.S.

“These buyers can afford aircraft in the private jet space. It’s not impacting demand in any way,” he commented. “And because I have the benefit of a pricing discipline strategy, we’re able to absorb and impact it.”

In August, Embraer group CEO Francisco Gomes Neto said that tariffs inflicted a $20 million charge on its second-quarter earnings. He said the company, which has its global customer service center in Melbourne, Florida, is negotiating for relief from the tariffs.

“It’s obviously affecting the company’s overall results, but we’re very thoughtful on minimizing the impacts and looking for solutions to offset that. It’s a lot easier to raise the parts pricing on all the airplanes than to raise the price on a [commercial] E-Jet or a greater rate on one product or one customer,” Amalfitano said.

“We have many ways to manage this over time, but we’re hopeful and confident that the administrations in both countries will come to a bilateral solution, similar to what they’ve done with the UK, EU, and other countries.”

U.S. content in Embraer’s aircraft helps to offset tariffs. Amalfitano did not detail how much U.S. content is in its executive jets, but commercial aircraft president and CEO Arjan Meijer previously told Leeham News that U.S. content reduced the 10% tariff on its airliners to an effective rate of 6%.