US Upholds Import Tariff on Bombardier

Posted December 22, 2017

The U.S. Commerce Department on Wednesday finalized duties of almost 300 percent on passenger jets made by Bombardier, a win for Boeing, which lodged the complaint against its Canadian rival.

Ross ruled Canada-based Bombardier received government subsidies and sold its C-Series jets below cost price in the USA, a step likely to lead to tariffs of more than 200 per cent on the plane.

Boeing stated the decision validated its complaints about Bombardier's aircraft pricing in the United States, "pricing that has harmed our workforce and USA industry".

The International Trade Commission will make its final injury determination by February 1, and if injury is found, Commerce will issue AD and CVD orders.

Boeing, she said, is seeking to "advance its market dominance by excluding Bombardier's C Series aircraft from the USA market".

But the Commerce Department's statement on Wednesday said that Bombardier, petitioners and the government of Canada agreed that that proposed agreement "does not impact these investigations".

Bombardier calls Boeing's criticism an "unfounded assault on airlines, the flying public, and the U.S. aerospace industry", saying the entire complaint has been overtaken by events.

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

The inquiry now moves to the United States worldwide trade commission, which will examine if the dumping and subsidies caused injury to Boeing. "This facility will provide USA airlines with a US -built plane thereby eliminating any possibility of harm due to imports".

Bombardier for its part expressed its disappointment that the U.S. Commerce Department did not take the opportunity to "rectify its past errors".

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

European planemaker Airbus SE, which is buying a controlling stake in the CSeries program and has a competing plane, has said it would add a second CSeries production line to a factory in Alabama, making it a US product for domestic airlines. He says nothing justifies such duties.

USA and Mexican trade officials will meet next month in Canada to continue NAFTA talks.

Boeing argues that Bombardier signed a deal to sell its new single-aisle CS 100 planes with a price tag of just $19.6 million each, far below the $33.2 million construction cost, and a pittance compared with the list price of $79.5 million - though that amount is nearly never paid.

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.

No planes have yet entered the United States.