Embraer is attempting to end the 10% tariff on its aircraft in the U.S., but warns that orders could be delayed or canceled as the fees are implemented.
The tariff increases the price of the aircraft by about $2 million and has cost the company approximately $80 million this year, which Edge Malaysia reported is nearly equal to its second-quarter income. The company aims for zero tariffs on its aircraft or aircraft parts. CEO Francisco Gomes Neto claims that the tariffs will only hurt the U.S. as the company will have to buy less equipment from the country, as it makes fewer aircraft.
“We don’t have any cancellation issues at this point in time, but mid-term, this might happen,” said Neto to Bloomberg on Sunday.
Embraer currently has the highest backlog in nine years at $31 billion. The company is also in discussions with the U.S. Air Force of using the KC-390 for transport and aerial refueling missions. If it is selected, Embraer will invest $500 million to produce the KC-390 in the U.S., according to AirDataNews.
