The US Department of Commerce on Tuesday slapped duties of nearly 220 percent on Bombardier Inc’s C Series aircraft in a victory for Boeing Co that is likely to raise tensions between the US and its allies Canada and Britain.
Commerce ruled that Montreal-based Bombardier used unfair government subsidies to sell jets at artificially low prices in the US.
“The US values its relationships with Canada, but even our closest allies must play by the rules,” US Secretary of Commerce Wilbur Ross said.
Photo: AP / Ryan Remiorz / The Canadian Press
Canada responded by saying it “strongly disagrees” with the US move.
“This is clearly aimed at eliminating Bombardier’s C Series aircraft from the US market,” Canadian Minister of Foreign Affairs Chrystia Freeland said.
Bombardier said the decision was “absurd .... US trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition.”
In April, Boeing charged that Bombardier had received at least US$3 billion in subsidies from the governments of the UK, Canada and Quebec Province.
The Chicago-based aircraft manufacturer asked the Commerce Department and the US International Trade Commission to investigate the alleged “predatory pricing.”
Specifically, Boeing said that Bombardier last year sold Delta Air Lines 75 CS100 aircraft for less than it cost to build them.
“Subsidies enabled Bombardier to dump its product into the US market, harming aerospace workers in the United States and throughout Boeing’s global supply chain,” Boeing said on Tuesday.
However, Delta has said Boeing did not even make the 100-seat jets it needed.
“Boeing has no American-made product to offer because it canceled production of its only aircraft in this size range — the 717 — more than 10 years ago,” Delta said in a statement on Tuesday.
Boeing’s complaint against Bombardier drew a backlash even before Tuesday’s decision.
Canadian Prime Minister Justin Trudeau this month threatened to stop doing business with Boeing, which is in talks to sell Canada 18 Super Hornet jet fighters.
British Prime Minister Theresa May yesterday said that she was bitterly disappointed by the decision.
May had urged US President Donald Trump to help find a solution to the Boeing-Bombardier dispute, which has put about 4,200 jobs at risk in Northern Ireland, where the jet’s wings are made.
Bombardier is the single largest manufacturing employer in Northern Ireland.
“The government will continue to work with the company to protect vital jobs for Northern Ireland,” May said on Twitter.
The UK Department for Business, Energy and Industrial Strategy said it would continue to work closely with the Canadian government to encourage all parties to reach a credible resolution as quickly as possible. It also criticized Boeing’s role in the dispute.
“Boeing’s position in this case is unjustified and frankly not what we would expect of a long-term partner to the UK — as well as damaging the wider global aerospace industry,” a spokeswoman for the department said.
Democratic US senators Richard Blumenthal and Christopher Murphy, who represent Connecticut, last week wrote a letter urging US government officials to “refrain from taking action that will endanger the many jobs in Connecticut that depend upon Bombardier.”
Engines for the C Series aircraft are made by Pratt & Whitney, based in East Hartford, Connecticut.
Commerce’s findings on Tuesday are not the end of the matter. The department is expected to announce its findings in another case against Bombardier early next month.
Then the trade commission — an independent federal agency that rules on trade cases — is to decide early next year whether to uphold the department’s duties.
Bombardier could appeal any sanctions to a US court or to a dispute-resolution panel created under North American Free Trade Agreement. Canada could also take the case to the WTO in Geneva.
Additional reporting by Reuters
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