Wednesday 18 October 2017

US slaps new 80pc duty on Bombardier

The US slapped duties on Bombardier's showcase commercial jet for the second time in as many weeks on Friday, upholding Boeing's case that its Canadian competitor sold planes at less than fair value. Photo: Reuters
The US slapped duties on Bombardier's showcase commercial jet for the second time in as many weeks on Friday, upholding Boeing's case that its Canadian competitor sold planes at less than fair value. Photo: Reuters

Andrew Mayeda and Frederic Tomesco

The US slapped duties on Bombardier's showcase commercial jet for the second time in as many weeks on Friday, upholding Boeing's case that its Canadian competitor sold planes at less than fair value.

The Commerce Department imposed a preliminary import duty of 80pc on Bombardier C Series aircraft based on its finding, according to an emailed statement. The agency ruled last week that the Montreal-based plane-maker, which invested more than US$6bn (€5.1bn) to develop the all-new C Series, benefited from unfair subsidies.

The second round of import duties marks the latest blow for Bombardier, which received financial support from Quebec and Canada as its biggest jet came in two years late and about $2bn over budget. The ruling is also bound to stoke tensions between the US and two key allies, Canada and the UK, which have expressed dismay with the Commerce Department. Bombardier employs over 4,000 workers at its east Belfast plants, and uses suppliers from around the island.

Both charges - last week's 220pc countervailing duties and Friday's anti-dumping restrictions - could be reversed by the US International Trade Commission if the tribunal concludes that Boeing wasn't injured by Bombardier's jet programme, a decision expected to be made next year. The Commerce Department also still needs to issue a final ruling in both cases.

Canadian Foreign Affairs Minister Chrystia Freeland said she was "extremely disappointed" in the latest US decision, vowing to defend the country's aerospace industry against "irresponsible and protectionist trade measures" that also hurt some US workers.

"These anti-dumping duties on Bombardier's C Series aircraft unfairly target Canada's highly innovative aerospace sector and its more than 200,000 workers," Freeland said. The measures also "put at risk the almost 23,000 US jobs that depend on Bombardier and its suppliers."

The controversy is likely to hang over Prime Minister Justin Trudeau's trip to Washington this week, where he is scheduled to discuss trade with US President Donald Trump just as negotiators hold the fourth round of talks to amend the North American Free Trade Agreement. Trudeau has warned that his government won't buy Boeing military jets unless the company drops the case.

Bloomberg

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