USA slaps steep tariffs on Canadian planemaker Bombardier

28 September 2017, 12:13 | Santos Harmon

Decision due on Bombardier trade dispute

Decision due from US on Bombardier trade dispute

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Bombardier's deal to supply billions of pounds worth of jets is in jeopardy after the US Commerce Department ruled that Bombardier received an unfair subsidy in the form of £135m investment pledge by the UK Government and Northern Ireland's power sharing administration.

The Prime Minister said she was "bitterly disappointed" by the aerospace giant's behaviour and its actions "undermined" the long-term partnership it had built up with the UK.

Rival Boeing claimed it received unfair state subsidies from the United Kingdom and Canada, allowing the sale of airliners at below cost prices in the US. Concerns have been raised that the ruling could lead to the company questioning its presence in the country, where it employs more than 4,000 staff across four sites.

The department said it imposed a steep 219.63 percent countervailing duty on Bombardier's new commercial jets after it made a preliminary finding of subsidization.

But there was also a glimmer of good news, after a senior Bombardier official said the firm was hoping to close several deals with Chinese airlines.

"Boeing was the big victor in the last defence review", Sir Michael said, "this is not the behaviour we expect from a long term partner".

Speaking at an event in Northern Ireland on Wednesday afternoon, United Kingdom defence minister Michael Fallon also said Boeing's behaviour in the trade dispute "could jeopardise" future contracts with the United Kingdom government, according to the Press Association.

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.

Sinn Féin Leader in the North Michelle O'Neill said the priority going forward must be the "livelihoods of local workers".

U.K. Defense Secretary Michael Fallon, speaking in Belfast, Northern Ireland, said Boeing's challenge could put at risk the company's defense contracts with the U.K.

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"Boeing stand to gain a lot of British defense spending".

Boeing claimed each jet cost $33m (£25m) to produce but that Bombardier had sold them for $20m (£15m) each in a display of "price dumping".

The manufacturer described the DoC's interim determination as "absurd" and "divorced from the reality about the financing of multi-billion-dollar aircraft programmes".

Theresa May has twice lobbied US President Donald Trump on the matter and met with Canadian Prime Minister Justin Trudeau ahead of the ruling.

The Canadian province of Quebec and Britain threatened retaliation on Wednesday over stiff USA tariffs imposed on Bombardier Inc's (BBDb.TO) CSeries jet that could affect thousands of jobs in the two countries.

The scale of the tariff was higher than what Boeing had sought, and Bombardier could be hit by even more tariffs as the regulatory process continues.

"This is an attack on innovation and competitiveness", she said.

"There are rules of global trade".

Ross Murdoch, the GMB union's national officer, said it was a "hammer blow" to Belfast and risked sending shock waves through Northern Ireland's economy.

Boeing's complaint arose after Northern Ireland's powersharing administration and the UK Government pledged to invest nearly £135 million in the establishment of the C-Series manufacturing site in Belfast.



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