USA Government Recommends 220% Import Tariff On CSeries

Photo: Bombardier

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The U.S. will begin collecting preliminary duties to offset the public assistance, a move that would potentially upend Bombardier’s planned deliveries of its C Series jets to Delta Air Lines Inc. next year.

Bombardier employs about 1,000 people in Belfast linked to the C-series, and about 4,000 people in total in Northern Ireland.

“Bombardier has quite a number of assembly facilities in the United States, so there will be USA job losses, if indeed Boeing succeeds in its action, which I don’t think it will”, he said.

Boeing had accused its rival of “price dumping” to win a lucrative contract from the American carrier Delta.

That should not have a huge immediate practical impact as it will be the spring of 2018 before Bombardier delivers any C-Series to Delta, its United States customer.

Politicians, defence officials and Canada’s aerospace industry were waiting Tuesday for the U.S. Commerce Department to say whether it believes Bombardier broke trade rules.

Jimmy Kelly, Unite Regional Secretary, said: ‘The decision taken by the United States department of commerce was not unexpected – unfortunately it is unlikely to be overturned by president Trump whose protectionist tendencies are well-known.

At the heart of Boeing’s complaint is a deal that was widely seen as the order that saved the Bombardier C Series program from its demise.

The jet’s list price is almost $80 million, but steep discounts are common.

“Today’s decision in favour of Boeing’s allegations of anti-competitive pricing poses a direct and very serious threat to the 4,500 Bombardier jobs in Belfast and many more dependent on them across our service sector and in the wider supply chain”, he said.

“I think it will go to legal territory whatever the number (in import duties) because Canada wants to make it a point of principle”, one of the people familiar with Bombardier’s thinking said.

“Subsidies enabled Bombardier to dump its product into the US market, harming aerospace workers in the United States and throughout Boeing’s global supply chain”.

Although Bombardier cannot legally skirt the measure by agreeing to pay any duty directly on Delta’s behalf, trade lawyers say it could technically import the jets itself through a local subsidiary in a way that would be neutral for Delta. It is this innovation that sets the C-Series apart and it is not in direct competition with Boeing’. Canadian Prime Minister Justin Trudeau threatened this month to stop doing business with Boeing, which is in talks to sell Canada 18 Super Hornet jet fighters. More than 50% of the Canadian jet is made up of US-sourced components, including it’s prized Pratt & Whitney geared turbofan engines.

British Prime Minister Theresa May has asked U.S. President Donald Trump to intervene in the dispute to help protect jobs in Northern Ireland.

“The simple fact is that no country can have a viable aerospace industry without the involvement of government”, said Unifor National President Jerry Dias. The C Series serves a market segment not supported by any US manufacturer.

Ultimately the government of Canada could pursue a case against the USA at the World Trade Organisation. While large airlines like United never pay list price, 70% off is the aviation equivalent of a Black Friday sale price.

“We are confident the USITC will conclude that no USA manufacturer is at risk because neither Boeing nor any other USA manufacturer makes any 100-110 seat aircraft that competes with the CS100”.

Bombardier could appeal any sanctions to a US court or to a dispute-resolution panel created under NAFTA.