The global economy is in a state of flux following the introduction of new tariffs by U.S. President Donald Trump and the jitters can be seen in Brazilian jet maker Embraer, which has voiced concerns citing costs of jets to be higher and even flying high along with their jets.
The tariffs, which are expected to set a minimum of 10% duties for all U.S. imports from countries like Brazil are predicted to add complexity and costs to Embraer’s business and its customers in the United States. The aerospace sector, which has operated without tariffs on parts or finished products for decades, is expected to be significantly impacted by these tariffs, according to a statement released by Embraer.
The introduction of these tariffs has not only affected Embraer but has also led to a sharp sell-off on Wall Street, marking the sharpest since the COVID-19 crisis. Asian stocks slumped as fears of a global economic slowdown grew. Japan ’s Nikkei 225 dropped 2.6%, while South Korea ’s Kospi slipped 0.8%. Australia’s S&P/ASX 200 sank 1.9%, and Chinese markets were closed for a public holiday.
The sweeping and aggressive implementation of these tariffs by Trump has taken even the pessimists by surprise. Mary Ann Bartels of Sanctuary Wealth called it the “worst-case scenario.”
Otherwise, the longest-running trade dispute was probably between the US Trade Representative (USTR), on behalf of Boeing, against “illegal” subsidies used by Airbus to launch every one of its airplane programs from inception in 1970 with the A300.
These subsidies came from the French and German governments, local taxing jurisdictions, and other entities. Called launch aid, the governments usually advance Airbus hundreds of millions of dollars for each airplane program.