December 16 2017

Delta's CEO calls United States tariff ruling on Bombardier jets 'absurd'

December 16 2017, 03:02 | Clarence Walton

The Commerce Department will slap stiff tariff on Bombardier's new jet

Decision due from US on Bombardier trade dispute

The U.S. Commerce Department placed big tariffs on imports of Canada's Bombardier C Series aircraft on Wednesday, saying exporters of the aircraft were receiving large subsidies.

The U.K.'s defense minister, Sir Michael Fallon, warned that the move could "jeopardize our future relationship" with Boeing, which enjoys billions of dollars in military contracts with Britain.

The Ministry of Defence has threatened to stop buying military equipment from Boeing in an escalating U.S. trade dispute that has put thousands of United Kingdom jobs at risk.

Action in the form of an global trade dispute was brought against the plane-maker by Boeing over a new C-series plane made by the Canadian firm.

Delta noted the decision is "preliminary" and said the real ruling will come early next year, when the International Trade Commission makes a final determination of whether any US manufacturer will be harmed by imports of the plane.

USA aerospace giant Boeing has moved to impose punitive tariffs on Canadian plane-maker Bombardier, one of Northern Ireland's biggest employers.

The minister said his government would re-double efforts with its Canadian counterparts to help bring about a settlement to the bitter dispute.

We have heard and understand the Prime Minister's concerns about Bombardier workers in Northern Ireland.

"Given that monetary policy affects economic activity and inflation with a substantial lag, it would be imprudent to keep monetary policy on hold until inflation is back to 2%", she said.

Labour leader Jeremy Corbyn urged the Government to stand up to the US President.

"This does not bode well for the UK's plan to be a leader in global free trade nor indeed ambitions of a free trade agreement with the European Union which can not match the benefit we now enjoy as part of the EU's Single Market".

Bombardier could appeal any sanctions to a USA court or to a dispute-resolution panel created under NAFTA. "Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft. I was shocked at the size of the tariff". Schedules call for the Department of Commerce to announce final determination on December 18 and the International Trade Commission to issue its final determination on February 1.

Tuesday's ruling was the first of two the U.S. Commerce Department is scheduled to release on Bombardier.

In the meantime, Bombardier's sole US contract for the CS100 is with Delta Airlines, and it wasn't expected to deliver the first of that 75-plane order until next spring. The tariffs were imposed after American rival Boeing accused Canada of unfairly subsidizing Bombardier.

For Bombardier, this is obviously a huge setback after what was shaping up to be a comeback year.

Union representatives in the United Kingdom were quick to call on the United Kingdom government to take counter measures to safeguard the jobs in Northern Ireland.

Still, in its complaint to commerce's International Trade Administration, Boeing asserts that the discounted deal represents a "material injury" to its business.

The ruling could potentially jeopardise the deal for up to 125 planes.

Other news