Brazil Negotiates with U.S. to Exclude Embraer Aircraft and Food Products from 50% Tariff
The Brazilian government is in a race against time negotiating with the U.S. to exempt Embraer aircraft from a looming 50% tariff, aiming to avert severe economic impact.
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The Brazilian government is undertaking intense diplomatic efforts to have the United States exclude aircraft manufactured by Embraer and a range of food products from a 50% tariff that the U.S. administration plans to impose starting this August 1.
According to information first reported by Folha de S.Paulo and confirmed by Reuters through a source with direct knowledge of the talks, this request is dominating recent discussions between the two nations. The negotiations have included at least three calls in recent days between Brazil's Vice President and Minister of Development, Industry, and Trade, Geraldo Alckmin, and the U.S. Secretary of Commerce, Howard Lutnick.
Although the press office of the ministry led by Alckmin denied prioritizing specific sectors, stating that the government "is working towards the suspension of the surcharges across all sectors," a Brazilian official acknowledged, on the condition of anonymity, the existence of strategic priorities. The source explained that the government cannot publicize these priorities due to a confidentiality clause in the negotiations and to avoid the perception that one sector is benefiting at the expense of another.
FAQ: The U.S. Tariff on Brazil
What is the measure? A 50% tariff on the import of various Brazilian products into the United States.
When does it take effect? August 1, 2025.
What is Brazil's main concern? The impact on Embraer, the world's third-largest aircraft manufacturer, and agricultural products like coffee and orange juice.
Why is Embraer so vulnerable? The United States is its primary market. A 50% tariff could lead to order cancellations for regional jets like the E-Jets by airlines such as Republic Airways and SkyWest, which operate for major U.S. carriers.
Embraer, the world's third-largest aircraft manufacturer, is the top concern for the Brazilian government. The company, which has dozens of pending deliveries to customers in the United States, has warned that the imposition of the tariff could trigger order cancellations, delivery deferrals, and job cuts. The impact on its revenue, according to the company itself, would be of a magnitude comparable to that suffered during the COVID-19 pandemic.
The U.S. market is vital for Embraer, particularly for its E-Jets family of regional jets. Airlines like Republic Airways and SkyWest are some of the world's largest operators of these aircraft, which are fundamental for regional connectivity in that country.
In response to the potential crisis, the Minister of Ports and Airports, Silvio Costa Filho, stated that the government will do "everything within its power to help Embraer," hinting at the possibility of offering credit lines to mitigate the financial blow.
In addition to aircraft, the United States is a key buyer of Brazilian food products. The citrus industry warns that the tariff could devastate Brazil's citrus belt, while coffee exporters would see the flow of their product to the North American market effectively halted.
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