By Skies Magazine | October 6, 2017 Estimated reading time 5 minutes, 8 seconds.
Bombardier was dealt another massive blow on Friday, as the U.S. Commerce Department announced it will impose a 79.82 per cent anti-dumping duty on the company’s C Series jets.
The duties will be added to preliminary countervailing tariffs of nearly 220 per cent, bringing the total duties to nearly 300 per cent.
“The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship,” said Commerce Secretary Wilbur Ross in a statement.
“We will continue to verify the accuracy of this decision, while do everything in our power to stand up for American companies and their workers.”
The decision comes after a petition from U.S. aviation giant Boeing, which has argued the Canadian and Quebec governments have unfairly subsidized the C Series program.
Boeing does not make an aircraft that directly competes with the C Series, but has alleged C Series aircraft are being sold at less than fair value. The company made its petition after Bombardier announced a deal with Delta Airlines for up to 125 C Series jets.
The duties will not be collected until after the firs C Series delivery to Delta, which is expected in the spring.
“This determination confirms that, as Boeing alleged in its petition, Bombardier dumped its aircraft into the U.S. market at absurdly low prices,” Boeing said in a statement quoted by The Canadian Press.
“These duties are the consequence of a conscious decision by Bombardier to violate trade law and dump their C Series aircraft to secure a sale,” Boeing said. “This dumping in our home market was not a situation Boeing could ignore, and we’re now simply asking for laws already on the books to be enforced.”
Bombardier made no immediate statement on Friday, but said last week it was confident the “absurd” countervailing tariffs will be reversed in final decisions in the coming months, The Canadian Press reported.
Enforcement of U.S. trade law is a “prime focus” of President Donald Trump’s administration, the U.S. Commerce Department said in an emailed statement.
From Jan. 20 through Oct. 5, the department said it has initiated 65 anti-dumping and countervailing duty investigations, a 48 per cent increase from the previous year.
Commerce is scheduled to announce its final anti-dumping determination in the Bombardier case on Dec. 19.
Bombardier also faces a challenge from Brazil, which has petitioned the World Trade Organization (WTO) for an investigation into Canada’s alleged use of government subsidies to produce Bombardier aircraft.
Brazil has alleged that Canada ran afoul of trade rules because its policies unfairly boosted the Canadian aerospace industry to the detriment of Brazilian aircraft maker Embraer S.A., according to Bloomberg News.
Bombardier said it was “confident that the investments and contribution programs mentioned in Brazil’s petition are in full compliance with all WTO and international trade rules,” Bloomberg reported.
The C Series program is a major economic driver in Canada, but also supports 22,700 jobs in more than nine U.S. states, according to Reuters. The news agency reported that Bombardier’s aerospace division spent $2.4 billion with more than 800 U.S. suppliers last year.
Bombardier also employs around 4,000 people at its factory in Northern Ireland, prompting the government of the United Kingdom to say Boeing’s behaviour “could jeopardize” future Ministry of Defence contracts for aircraft such as Apache helicopters, according to The Telegraph newspaper.
Canadian Prime Minister Justin Trudeau has also threatened to cancel the purchase of 18 Boeing Super Hornet fighter jets, an acquisition planned as an interim measure to augment Royal Canadian Air Force capabilities.
