The US Airforce late on Tuesday unexpectedly cancelled a $355m light aircraft contract granted to Sierra Nevada and Brazil's aircraft manufacturer Embraer. The deal was scraped following objections from a rival US aerospace company.
Hawker Beechcraft protested the award, saying its AT-6 plane was unjustly shut out from the competition.
The deal for 20 Embraer AT-29 Super Tucano aircrafts was agreed in December as part of a mission to arm the Afghan military following a NATO troop exit.
The awarded contract was originally seen as a significant victory for Embraer as it emphasised closer military ties between the two nations.