Trump's Tariff Shift May Boost Brazil's Embraer and US Aerospace Sector

• Embraer gains competitive parity as its business and regional jets can now enter the U.S. duty-free, matching treatment of Bombardier and Dassault aircraft
• The exemption creates a temporary window for airlines like Alaska Airlines, SkyWest, and American Airlines to accelerate imports of Embraer E175 regional jets without tariffs
• Industry concerns persist as Commerce Department's Section 232 investigation could reimpose aerospace tariffs, and existing steel/aluminum duties continue raising aircraft production costs

Summary

Brazilian planemaker Embraer and the U.S. commercial aerospace sector are set to benefit from the Trump administration's revised tariff regime announced Tuesday. Commercial aircraft, engines, and aerospace parts will be exempt from the temporary 10-15% global import duty imposed under Section 122 of the Trade Act of 1974.

Key Developments:

The exemption removes a previous 10% tariff on Embraer aircraft imports, leveling the playing field with competitors like Canada's Bombardier and France's Dassault, which already enjoyed duty-free access. Last July, Trump had imposed tariffs on Brazilian goods while sparing aircraft from the steepest penalties.

Embraer is scheduled to announce a new variant of its business jet on Tuesday. U.S. carriers including Alaska Airlines, SkyWest Airlines, and American Airlines operate or have ordered Embraer's E175 regional jets. Alaska Airlines confirmed its next E175 delivery is scheduled for summer, allowing time to assess the tariff landscape.

Concerns Remain:

Industry experts cautioned that uncertainty persists. The aerospace sector continues facing higher costs from existing U.S. tariffs on steel and aluminum used in aircraft parts manufacturing. Additionally, the Commerce Department is conducting a Section 232 investigation into national security risks from imported goods, which could potentially result in future aerospace tariffs.

Aviation attorneys described the exemption as creating a temporary "window" for duty-free aircraft imports, particularly for pre-owned business jets, though the duration remains unclear. Analysts noted the exemption is "encouraging" for the industry but emphasized that shifting White House policy continues generating uncertainty. One expert suggested blanket aerospace tariffs are unlikely, given the sector's status as a net exporter.