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Following on from last week’s 219.63% duty levied by the U.S. government on Canadian plane manufacturer Bombardier’s CSeries aircraft for “countervailable subsidies”, the U.S Commerce department has added a duty of 79.82%. This latter figure is based on a predetermination of what has been referred to as the investigation into the ‘dumping’ of the CSeries aircraft on the U.S market.
The ‘dumping’ of CSeries aircraft – their sale at appreciably below cost price – relates to a complaint made by American plane manufacturer Boeing who had petitioned the Commerce Department, alleging that Bombardier had sold 75 CSeries aircraft to American carrier, Delta Air Lines, at a figure estimated to be US$19.6 million per unit, as opposed to the list price of US$71.8 million.
These two duty decisions are being classed as preliminary and the rulings based on the fact that Bombardier failed to produce information as requested by the Commerce Department. However, Bombardier disputes such a claim regarding its lack of cooperation, stating that: “Commerce’s statement that Bombardier is not cooperating with the investigation is a disingenuous attempt to distract from the agency’s misguided focus on hypothetical production costs and sales prices for aircraft that will be imported into the United States far in the future.”
Bombardier added that aircraft programs cost billions of dollars, subsequently taking years to provide a financial return on investment. “By limiting its antidumping investigation to a short 12-month period at the very beginning of the CSeries programme, Commerce has taken a path that inevitably would result in a deeply distorted finding.”
The duty is applicable to all Canadian-built aircraft which fall into the 100- to 150-seat category and will take effect only once the U.S. International Trade Commission rules in favor of Boeings complaint, with a decision expected next year.