Brazil asks US to spare food products, Embraer planes from 50% tariff, source says

Reuters

5 days ago

BRASILIA, July 29 (Reuters) - Brazil's government has asked the U.S. to exclude food products and Embraer's (EMBR3.SA), opens new tab aircraft from the 50% tariff it plans to impose on Brazilian goods starting August 1, a source familiar with the matter told Reuters on Tuesday.
The request was the main topic of recent discussions between Brazilian and U.S. officials, the source said, including three calls between Brazil's Vice President and Trade Minister Geraldo Alckmin and U.S. Commerce Secretary Howard Lutnick in recent days.
Newspaper Folha de S.Paulo first reported the request on Monday.
The press office of Brazil's Development and Trade Ministry, which is headed by Alckmin, denied the report, saying the government is working to suspend the tariffs across all sectors.
But a Brazilian official, speaking on condition of anonymity to discuss the sensitive topic, acknowledged that the government had some priorities that it could not make public because of a confidentiality clause in the negotiations.
It also wants to avoid the perception that it is trading off some sectors for others, the source said. But the same person added that some sectors needed to be prioritized in the talks due to the severity of the impact in certain areas.
Embraer, the world's No. 3 planemaker after Airbus (AIR.PA), opens new tab and Boeing (BA.N), opens new tab, is currently the government's top concern, with dozens of pending deliveries to U.S. airlines. It has said a 50% tariff could trigger order cancellations, deferred deliveries and job cuts, hammering its revenue like the pandemic did.
Ports and Airports Minister Silvio Costa Filho said the government would do "everything within its power to help Embraer," hinting at potentially providing the planemaker with credit lines.
In addition to aircraft, the U.S. is also a large buyer of Brazilian food products, such as coffee and orange juice.
Trump's tariff plans could devastate Brazil's citrus belt, where factories are already scaling back production and orange farmers are considering leaving fruit to rot due to low prices. Tariffs could also effectively halt the flow of Brazilian coffee to the U.S.