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Brazil planemaker Embraer hopeful about fresh US sales despite tariffs

The CEO of Embraer believes that the planemaker can sell its E2 regional aircraft to a U.S. airline, but acknowledges tariffs on Brazilian products may complicate efforts in securing a first order. Last week, President Donald Trump lifted a tariff of 50% on Brazilian aircraft imported to the United States. However, a 10% tax was imposed by April. Embraer tried for years to convince U.S. carriers that its E195E2 was a "small narrow body" aircraft which could complement larger single-aisle planes. However, it has not been able to secure an order from its No. 1 market. Embraer has been trying to sell its E195-E2 as a "small narrow-body" that could complement the operation of larger single aisle jets, but it has failed to score an order in its No.

Francisco Gomes Neto, CEO of the company, said on Tuesday: "We think it's (possible)." The additional cost makes it more difficult. We have been speaking to potential clients, but a zero-rate would certainly make things easier.

Tariffs are added to the difficulties Embraer faces already in cracking this part of the U.S. Market due to a mismatch in the weight of aircraft and restrictions within pilot union agreements.

Embraer’s first-generation E175E1 smaller jet is essential for regional routes in the United States and there is no substitute.

The E2 family is in direct competition with the Airbus A220, which is flown by airlines such as Delta or JetBlue. Airbus has an Alabama assembly line for this plane. The Brazilian company has advocated for a return of zero-tariff regulations for the aviation and aeronautics industries, particularly after a provisional agreement between the U.S.

"If Boeing’s archrival will have a zero-rate, why do we, who are not even in competition with them, face 10%?" Gomes Neto referred to the competition between Airbus, which is based in the United States, and Boeing. "It's not very logical."

Embraer's pitch for tariff relief includes a $500 million U.S. assembly line for its KC-390 airlifter, should the country decide to purchase the military jet, which competes with Lockheed Martin's C-130 Hercules. Embraer's pitch included a $500-million U.S. Assembly Line for its KC-390 Airlifter, if the country decided to purchase the military aircraft, which competes against Lockheed Martin's C-130 Hercules.

Gomes Neto told reporters that he had recently made the case for his "business opportunity" to senior U.S. government officials.

The executive said that Embraer was working with a partner "relevant" to introduce KC-390 to the country but refused to identify it. (Reporting and editing by Christian Plumb, Rod Nickel and Gabriel Araujo)

(source: Reuters)