Monday, 22 January, 2018

United States upholds almost 300% duties on Bombardier in Boeing case

Boeing commercial Boeing commercial
Lindsey Cook | 22 December, 2017, 02:09

"Boeing does not produce an aircraft in the same class as the C-Series and didn't even bid for the Delta contract it is complaining about, which leaves its complaint totally without merit".

Commerce Secretary Wilbur Ross said the decision was based on a "full and unbiased review of the facts in an open and transparent process".

The decision follows the Commerce Department's preliminary recommendation of duties of that amount on Bombardier's C Series jets, earlier this autumn.

Boeing, which launched the trade case in April, is arguing that Canadian and British governments are subsidizing the plane's cost, allowing Bombardier to sell into the US market at unfairly low prices.

"As a result of its exhaustive investigation, the Commerce Department has calculated a final duty determination of 79.82% to be imposed on each Bombardier C Series aircraft and partially-assembled aircraft imported into the United States as a result of dumping, and an additional 212.39% duty due to evidence of foreign government subsidization".

It is expected to make a final decision in February 2018, which would trigger the duties.

The decision also included language that could disrupt Bombardier's plan to circumvent the tariff by completing final assembly of CSeries aircraft ordered by United States airlines in Mobile, Alabama.

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The plan would create a new wrinkle because the planes would effectively be a US product."There's no case here", Bombardier's Bellemare said, calling the complaint "ridiculous".

The Commerce Department's decision comes as the Trump Administration takes a hard line on trade practices it views as hurting American workers.

In the progress of the trade dispute, Bombardier agreed to sell a majority interest in the CSeries program to Airbus, intensifying the completion in that product category for Boeing. The trade dispute stems from a complaint by US aerospace giant Boeing against its Canadian rival that found a receptive ear in President Donald Trump, whose "America First" agenda has included taking a tough line in matters of worldwide commerce.

"Unfortunately, the Commerce Department decision is divorced from this reality and ignores long-standing business practices in the aerospace industry, including launch pricing and the financing of multibillion dollar aircraft programs", Bombardier said.

"Today's decision validates Boeing's complaints about the Bombardier prices in the United States, prices that have harmed our workforce and the American industry", said Boeing in a press release.

The union represents 4,700 workers at Bombardier in the Montreal area.

He also said that Boeing's claim was meritless since they don't have an aircraft that can compare to the CSeries.

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