Trade commission rules against Boeing in case against Bombardier

Bloomberg

Quebec politicians and aerospace industry officials claimed victory Friday after Bombardier won its bid to overturn huge global tariffs imposed by the USA on its C Series jets.

Boeing, the American giant that is the world's largest aerospace company, accused Bombardier, a smaller Canadian rival, a year ago of accepting illegal government subsidies from Canada and Britain for its C Series programme, allowing it to sell the jets cheaply in the United States.

Over almost a year, the dispute intensified, adding to tensions between the USA and Canada over cross-border trade.

Faced with the prospect of huge tariff, several months ago, Bombardier announced a partnership with Airbus to build an assembly line at Airbus' facility in Mobile to make U-S built C-series planes.

After the ITC's decision May said: "I welcome this decision, which is good news for British industry".

Boeing, in its own statement, said it was disappointed in the decision and continued to experience "the effects of those unfair business practices in the market every day". About 50 companies in the United Kingdom supply Bombardier with parts for the C-Series.

The 4-0 decision is defeat for Boeing, which had argued that Bombardier's trade practices were illegal and harmful to its business. The U.S. airline threw a lifeline to the slow-selling C Series in 2016 by ordering at least 75 CS100 jets - a deal with a list value of $5.6 billion at the time. Boeing says those funds allowed Bombardier to sell its new C Series airliner to Delta Air Lines at "absurdly low prices" in violation of USA trade rules.




At a meeting with Donald Trump in Davos on Thursday, Theresa May had raised the issue of Bombardier, which is due to begin delivering an order for up to 125 new jets to Atlanta-based Delta Airlines in 2018.

In response, Bombardier struck a deal with Boeing's rival Airbus, which saw the European firm take a 50.1% stake in the C Series line for no cash outlay.

Boeing has forged close ties with President Donald Trump, who this week slapped tariffs on imported solar panels and washing machines on the grounds that they're harming USA industry.

The case, among others leveled against Canada, by the United States lately, have inflamed tensions between the two countries in ongoing negotiations to update the 24-year-old North American Free Trade Agreement. The case threatened to raise tensions between Washington and USA allies Canada and Britain, which has a Bombardier plant in Northern Ireland. "We will carry on full steam with our C series project... creating new jobs in the U.S".

Delta Air Lines said it was pleased with the ruling and called the Boeing complaint an "attempt to deny USA airlines and the US travelling public" access to the Bombardier C Series.

"Today's decision is a victory for innovation, competition and the rule of law", Bombardier said in a statement.

Late past year, Canadian officials made good on an earlier threat to cancel a proposed purchase of F/A-18 Super Hornet fighter planes, dealing a blow to Boeing's defense contracting business, which was already smarting from losses on giant US defense contracts for the F-35 Joint Strike Fighter and the B-21 Raider.

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