Safran, Embraer Say Aerospace Industry Must Push For Zero Tariffs

PARIS—The aerospace industry needs to collectively push for a return to a zero tariff situation, Safran and Embraer executives told the Paris Air Forum June 13.

“For me there’s only one number that’s correct and that’s zero percent,” Embraer Commercial Aviation CEO Arjan Meijer said.

The comments came during a round table at the Paris Air Forum, and after Airbus CEO Guillaume Faury had said at the same event that 10% tariffs would be acceptable.

Faury had told Aviation Week earlier in June, that while he did not like tariffs, if it was not possible to reach an agreement through negotiation, there needed to be a symmetrical response from Europe to the U.S. tariffs that have been imposed in recent weeks.

The previous set-up of a no tariff agreement for the sector had been a “win/win,” Safran CEO Olivier Andriès told the panel.

“You cannot expect the suppliers to swallow the impact of the tariffs. What is happening with this trade war started by the U.S. administration, at the end of the day, the U.S. airlines and the U.S. passengers will pay—it’s as simple as that,” Andriès said.

Although the participants said they would support any move by Europe to retaliate, Embraer’s Meijer said there needed to be a collective push by industry to return to that zero tariff basis. “We need to strive for that collectively because [of] the benefits of globalization. If we change that, we go back to a world in which we do business in areas where there’s no optimization and the competencies are maybe not there, and it will affect in the end the customer products and the customer ticket prices,” he said.

Tariffs at 10% are “not OK,” Andriès said. “This is the money you need to invest to prepare the future. It is not sustainable. This is why the European Commission will respond.”

Andriès said he supported that, but “would prefer that we come back to a more reasonable way forward, which is to get back to zero tariff situation. We can’t live a long life with a 10 percent dissymmetry.”

Andriès added: “The only one who is going to suffer in the end from tariffs is the consumer, the client. It’s going to create an inflationary period. We were exiting one, we are now returning to one for other reasons.”

The engine manufacturer has been focusing on boosting agility and resilience to face the volatile and fast-changing situation, Andriès said. “By the end of 2024, the situation was progressively getting more normalized,” said Andriès, referring to the succession of events that started with the pandemic and continued with a fragile supply chain, then the invasion of Ukraine and its impact on raw material supplies. “So, we needed some animation ... Mr. Trump came in,” he said. “This is a change of mindset. Before, it was all about optimizing cost and footprint in a globalized world. We need to build resiliency—it has a cost, but it is worth it.”

The industry had already been struggling to recover after the pandemic and supply chain difficulties, and for Embraer the failed Boeing merger had also been a challenge, Meijer said. “Having tariffs come on top of that is very impactful, not just for Embraer but for the whole industry,” Meijer said. “We really don’t see any winners in this discussion; it creates a lot of uncertainty. One of the things we were lacking in the supply chain were buffers, which were taken out with the COVID situation. The industry was rebuilding those, and tariffs make suppliers take individual decisions that affect the supply chain.”