*

Embraer ( ERJ ) faces 10% tariff on Brazilian goods in US market

*

E2 jets struggle with US pilot agreement restrictions

*

Embraer ( ERJ ) advocates for zero-tariff rules in aviation

industry

By Gabriel Araujo

SAO PAULO, Aug 6 (Reuters) - Embraer's ( ERJ ) CEO

believes the planemaker will be able to sell its E2 regional

jets to a U.S. carrier, but acknowledges that tariffs on

Brazilian goods may complicate efforts to secure a

groundbreaking first order.

The company avoided a major setback last week when President

Donald Trump exempted aircraft from a 50% tariff on U.S. imports

from Brazil, but still faces a 10% duty imposed in April.

Embraer ( ERJ ) has long tried to sell U.S. airlines on the merits of

its E195-E2 as a "small narrow-body" that could complement the

operation of larger single-aisle jets, but has failed to score

an order in its No. 1 market, even as it has landed clients for

the plane in Europe and elsewhere.

"We believe it is (possible)," CEO Francisco Gomes Neto told

Reuters on Tuesday. "But it does become more difficult because

of the additional cost. We've been talking to potential

customers, but of course, a zero rate would make it all much

easier."

The tariffs come on top of the difficulty Embraer ( ERJ ) already

faces in cracking that part of the U.S. market because of a

mismatch between the weight of the aircraft and restrictions in

pilot union agreements.

Embraer's ( ERJ ) smaller, first-generation E175-E1 jet, which

complies with the clause, is key to U.S. regional routes and has

no clear substitute.

The E2 family competes with the Airbus A220 flown

by carriers such as Delta and JetBlue ( JBLU ), for

which the European planemaker has an assembly line in Alabama.

The Brazilian firm has been advocating for a return to

zero-tariff rules for the aviation and aerospace industries,

especially after a provisional deal between the U.S. and

European Union exempted aircraft from tariffs.

"If Boeing's ( BA ) archrival is going to have a zero rate, why are

we, who don't even compete with them, going to face 10%?" Gomes

Neto said, referring to competition between Airbus and

U.S.-based Boeing ( BA ). "It doesn't make much sense."

While making its case for tariff relief, Embraer ( ERJ ) has

underscored its U.S. ties, including local jobs and plans to

purchase $21 billion worth of U.S. products by 2030.

The firm's pitch includes a potential $500-million U.S. assembly

line for its KC-390 airlifter, should the country decide to

purchase the military jet, which competes with U.S.-based

Lockheed Martin's ( LMT ) C-130 Hercules.

"Competition there is tough, we're aware of that, but we're

excited and believe there is an opportunity," Gomes Neto said,

adding he recently presented the case to senior U.S. officials

as a "business opportunity."

The executive added that Embraer ( ERJ ) has been working with a

"relevant partner" to introduce the KC-390 in the country, but

declined to name it.