Business Irish

Saturday 18 August 2018

May 'bitterly disappointed' by US tariff move on jet sales

British PM Theresa May
British PM Theresa May

UK Prime Minister Theresa May is "bitterly disappointed" by a US Department of Commerce decision to impose a tariff of nearly 220pc on a new model of passenger jet manufactured by Bombardier, one of Northern Ireland's biggest employers, Downing Street said.

The comment came after Mrs May was accused of being "asleep at the wheel" as unions warned that thousands of jobs could be put at risk by the US move.

More than 4,000 people are employed in Belfast by Canadian multinational Bombardier and thousands more jobs in Northern Ireland are supported through the manufacturer's supply chain, according to trade unionists.

Mrs May had lobbied US President Donald Trump over the dispute, which was sparked by complaints from rival Boeing that Bombardier received unfair state subsidies from the UK and Canada, allowing the sale of airliners at below cost price in America.

Read more: Explained: Everything you need to know about the Bombardier row threatening thousands of jobs

The Democratic Unionist Party (DUP), which the Tories rely on to swing key Commons votes for the Government, has repeatedly pressed the Prime Minister over the issue.

The controversial US decision came as Foreign Secretary Boris Johnson was using the launch of a new think-tank on Wednesday to push the cause for global free trade.

Announcing the regulator's preliminary finding on Tuesday, US Secretary of Commerce Wilbur Ross said the subsidisation of goods by foreign governments was something that President Trump's administration "takes very seriously".

Bombardier labelled the determination "absurd", while in its response the UK Government said the statement was "disappointing" and pledged to defend British interests "at the very highest levels".

However, unions warned that the preliminary determination was "unlikely" to be overturned by Mr Trump, who has been clear in his aim to fiercely protect American jobs, casting a shadow over the industry's future in Northern Ireland.

Ross Murdoch, the GMB union's national officer, said the initial ruling was a "hammer blow" to Belfast and risked sending shockwaves through Northern Ireland's economy.

"Theresa May has been asleep at the wheel when she could and should have been fighting to protect these workers. It's high time she woke up," he said.

Another 9,400 supply chain jobs could be wiped out in Northern Ireland on top of those directly employed at the plant, Mr Murdoch warned.

"That's 14,000 people in Northern Ireland now in jeopardy," he said.

Unite union regional secretary Jimmy Kelly said: "The decision taken by the US Department of Commerce was not unexpected - unfortunately it is unlikely to be overturned by President Trump, whose protectionist tendencies are well known.

"The threat of punitive tariffs on the C-Series will cast a shadow over Bombardier's future unless the company can source alternative and substantial sales outside the US market."

DUP leader Arlene Foster pressed Mrs May to raise the issue with Mr Trump when the two met in New York earlier in September.

Mrs Foster said the DoC's determination was "very disappointing", but added that it was not the end of the process.

"The C-Series is a hugely innovative aircraft that is vital to Bombardier's operations in Belfast," she said.

"It is this innovation that sets the C-Series apart and it is not in direct competition with Boeing."

The alleged unfair subsidy arose after Northern Ireland's powersharing administration and the UK Government pledged to invest almost £135 million in the establishment of the C-Series manufacturing site in Belfast.

The programme also received one billion US dollars from the Canadian provincial government in Quebec in 2015 when its fortunes appeared to be ailing.

Boeing's complaint said it was seeking a "level playing field" for global competitors, but Bombardier accused its rival of hypocrisy.

The operation's immediate future was thought to have been secured after Bombardier signed a $5.6bn deal in 2016 to provide the aircraft.

The manufacturer, which has been a major employer in Northern Ireland for 30 years, is due to begin delivering a blockbuster order for up to 125 new C-Series jets to Atlanta-based Delta Airlines in 2018.

Trade unionists expect a final ruling on the pricing policy to be made in February and the regulator said it will continue to evaluate its decision.

The Department of Commerce's enforcement and compliance unit is responsible for vigorously enforcing US trade laws and does so through an impartial, transparent process that abides by international rules and is based solely on factual evidence, its statement said.

It added: "Imports from companies that receive unfair subsidies from their governments in the form of grants, loans, equity infusions, tax breaks and production inputs are subject to 'countervailing duties' aimed at directly countering those subsidies."

Shadow education secretary Angela Rayner called on the Government to protect the jobs involved.

She told BBC Radio 4's Today programme: "The Bombardier situation is quite a crucial one because these are UK jobs that we depend on, thousands, and actually the Government were involved in that contract process and were robust and I think that we have to defend the fact that that contract was awarded and we followed the rules."

Press Association

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