Several American airlines and the Brazilian aircraft manufacturer Embraer might be among the first beneficiaries of President Donald Trump’s updated tariff policy, but industry attorneys caution that the benefits might only last a short while.
Commercial aircraft, engines, and aerospace equipment are exempt from a temporary 10% global import levy imposed under Section 122 of the Trade Act of 1974.
Later, Trump declared that the tax would increase to 15% in order to replace previous tariffs that the US Supreme Court had overturned.
However, the exception is broad for aerospace.
In addition to protecting aeroplanes from the new worldwide tax, it also creates parity for Brazilian exporters that previously had to pay a 10% levy in the US market.
The step “reduces competitive distortion” for Embraer’s business and regional planes in the United States, where competitors from Canada and Europe had entered duty-free, according to a report published Tuesday by the Brazilian financial daily Valor Econômico.
O Globo pointed out that the aerospace exemption highlights the strategic significance of aviation in bilateral trade and stands in stark contrast to the general tightening of US trade policy toward Brazil.
Embraer’s relief, and a new level of competitiveness
The action eliminates the competitive disadvantage Embraer faced against rivals like Dassault Aviation and Bombardier, whose private aircraft had been entering the US market duty-free while Brazilian-built aircraft were subject to a 10% import levy.
Trump put a 50% tariff on the majority of Brazilian exports last July, claiming that former President Jair Bolsonaro was the target of a “witch hunt.”
Aircraft were subject to a 10% import duty but were exempt from the worst penalties. In the past, Embraer had characterised that tariff as detrimental but manageable.
The exemption now occurs at a critical juncture.
In order to take a more aggressive stance in the profitable US private aviation industry, which is the largest in the world, the Brazilian manufacturer is anticipated to introduce a new model of its Praetor business jet line.
According to industry lawyers, the shift creates a brief window of opportunity.
Pre-owned business aircraft that were previously subject to tariffs might now enter the country duty-free, which could speed up secondary market deals.
The implications for American Airlines
Regional carriers in the United States that depend on Embraer’s E175 aircraft may also profit from the tariff carve-out.
The next E175 delivery from Alaska Airlines is planned for the summer, the airline announced Monday, adding that it now has time to see “where the tariff landscape settles.”
Although industry insiders suggest the exception could promote speedier imports while the window is still open, SkyWest Airlines and American Airlines, both of which have outstanding E175 orders, have not yet made their plans public.
Analysts predict a “short-term surge” in deliveries to the United States as airlines protect themselves from future trade turbulence, according to the Brazilian business newspaper Folha de S. Paulo.
Why the outlook is still clouded by uncertainty
Despite the seeming victory, industry conversations remain dominated by caution.
As part of a national security inquiry that might theoretically support new tariffs on aircraft, engines, or parts, the Trump administration is looking at Brazil’s trade practices and commercial aerospace imports separately under Section 232 of US trade law.
Experts suggest that general aerospace tariffs seem unlikely at this time.
Aircraft have always received special status in trade agreements, and the US aerospace industry is often seen as a net exporter.
The United States’ steel and aluminium tariffs are nevertheless a source of pressure.
The final cost of aircraft and engines made using imported materials may increase due to rising input costs, even though aircraft are excluded under Section 122.
At a webinar organised by the National Business Aviation Association, lawyers characterised the exception as “encouraging,” but cautioned that changing policy cues from Washington still make long-term planning challenging.
An industry with strategic importance in political crosscurrents
In international trade, aerospace holds a special place. It is highly interwoven across borders, strategically important, and capital-intensive.
For instance, US regional carriers rely on Brazilian-built aircraft to effectively service smaller markets, while Embraer depends on American suppliers for engines and avionics.
This interdependence is reflected in the existing exception.
However, it also emphasises how swiftly trading conditions may change when the executive branch is in charge.
For the time being, Embraer seems to be in a unique position to gain from a convergence of business and political objectives.
The issue is whether manufacturers and airlines will expedite transactions and supplies while the tariff door is open or if they will wait for further information.
Temporary relief might provide breathing room in an industry where supply networks span continents and aircraft orders are scheduled years in advance.
Trade policy turbulence, however, can be just as disruptive as any storm at 35,000 feet, as aviation executives have discovered time and time again over the past ten years.
Whether this exemption represents a long-term reset or just another temporary clearing in an unstable trade sky will become obvious over the coming months.
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