Published: Fri, December 22, 2017
Finance | By Kristine Clayton

USA finalizes hefty duties in Bombardier-Boeing trade case

USA finalizes hefty duties in Bombardier-Boeing trade case

The US Commerce Department on Wednesday confirmed its decision to impose punitive tariffs of almost 300 percent on airplanes manufactured by Canada's Bombardier (Toronto: BBD-A.TO - news) in a trade dispute that has inflamed relations with Ottawa.

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

The fight, which has contributed to escalating trade tensions between the USA and Canada, stems from a 2016 sale of 75 C-Series jets to Delta Air Lines.

He also added: "We would urge the US International Trade Commission to do the right thing for fair trade and jobs by finding against Boeing and setting aside the commerce department's determination when it makes its final decision in the New Year". Boeing said Bombardier hurt its chances of selling its 737 airplane in the US, which Bombardier denies.

Boeing argues that the Commerce Department investigations have already shown that Bombardier has accepted billions of dollars in illegal government subsidies to prop up its C Series program.

"Today's decision validates Boeing's complaints regarding Bombardier's pricing in the United States, pricing that has harmed our workforce and US industry", Boeing said in a statement.

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

The inquiry now moves to the United States global trade commission, which will examine if the dumping and subsidies caused injury to Boeing.

The Commerce Department's decision comes as the Trump Administration takes a hard line on trade practices it views as hurting American workers. "This facility will provide USA airlines with a US -built plane thereby eliminating any possibility of harm due to imports".

"A single large order, like Bombardier's sale to Delta, takes years of demand out of the market".

"The Government of Canada is deeply troubled by the protectionist nature of Boeing's allegations, which seek to advance its market dominance by excluding Bombardier's C Series aircraft from the US market", Freehand said.

Boeing says that should not negate the duties because Airbus and Bombardier would import fuselages and wings and merely be assembling in the United States. The U.S. decision means that the relations between the country and its neighbor, Canada are likely to be terribly strained.

Bombardier was able to underprice the jets due to $3 billion in unfair government subsidies, Boeing says.

Under a newly forged Bombardier-Airbus partnership a new manufacturing plant will be built in Alabama where the planes will be assembled, providing a possible avenue to avoid the hefty duty.

Like this: