United States imposes huge tariff on Bombardier aircraft

28 September, 2017, 00:11 | Author: Kristopher Anderson
  • Delta has signed up for 125 of the new C Series

In response, an interim tariff of 219.63 per cent has been proposed on the import of Bombardier's C-Series jet to the US.

Theresa May has hit out at Boeing over the escalating USA trade dispute with Belfast-linked rival Bombardier, warning its behaviour was "no way to operate".

Canadian Trade Minister Francois-Philippe Champagne described it as a deplorable decision and one which shows that Boeing is not a "trustworthy partner".

Prime Minister Justin Trudeau has said the Canadian government won't buy Boeing military jets unless the company drops its case against Bombardier.

The Northern Ireland powersharing Executive and UK Government pledged to invest nearly £135 million in the establishment of the C-Series manufacturing site in Belfast.

The US Department of Commerce has clobbered 220% after it ruled that a $1 billion investment from Quebec and almost half that amount in loans from the Federal government was used to offer Delta Airlines CSeries planes at a below-market price.

"This is just a preliminary decision, so this will be a risk overhang on the program for some time", said Chris Higgins, an analyst at Morningstar.

The leader of the Unite union in Northern Ireland, Jimmy Kelly, however, has deemed it "unlikely" that the initial decision of the u.s. secretariat for the Trade to be reversed " by the president Trump, whose penchant protectionist are well known ".

The dispute could spill into talks between Canada, the United States and Mexico to update the North American Free Trade Agreement.

"The US values its relationships with Canada, but even our closest allies must play by the rules".

'We will continue to work closely with the Canadian government to encourage all parties to reach a credible resolution as quickly as possible'.

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Around a thousand people are employed in Bombardier's Belfast factory making the C-Series jet's wings - that's a quarter of the workforce. Boeing has complained the 110-to-130 seat aircraft were dumped below cost in the US market a year ago while benefiting from unfair subsidies.

That decision isn't expected until sometime next year, possibly May or June.

"Theresa May has been asleep at the wheel when she could and should have been fighting to protect these workers", Murdoch said.

"This result underscores what we have been saying for months: the U.S. trade laws were never meant to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition", it added. The aircraft entered commercial service previous year in Europe.

The controversial tax ruling is the result of a long-running dispute between Bombardier and Boeing, which has claimed that unfair state subsidies from the United Kingdom and Canada had helped Bombardier win a major deal to supply up to 125 of the jets to USA airline Delta.

Bombardier has repeatedly rejected Boeing's claims, accusing its rival of pure hypocrisy after it alleged anti-competition practices in the sale of aircraft.

In a statement Bombardier said: "We strongly disagree with the commerce department's preliminary decision".

A final determination by Commerce is not expected until December 19.

Tuesday's ruling was a stunning turn in the dispute, as Boeing had been asking for an 80 per cent duty.

The Department of Commerce was set to make a second ruling on the tariff in Washington on 5 October, and the US International Trade Commission announced it would be convening in February 2018 to rule on whether it would uphold or remove the penalty.

"And they will have a very hard time in proving that Bombardier is causing material harm to that business in the United States".

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