Boeing and Bombardier lock horns over decision to impose tariffs on C Series

Bombardier has been hit by a preliminary ruling from the Department of Commerce to impose a tariff of 219.63% on each C Series aircraft imported into the United States.

The decision comes after Bombardier’s competitor Boeing claimed the Canadian company had benefited unfairly from government and state subsidies allowing it to “dump” its new aircraft onto the US market.

US airline Delta has placed firm orders for 75 C Series aircraft with the option to order another 50.

In a statement after the ruling Boeing said: “The U.S. Department of Commerce today affirmed that Bombardier has taken massive illegal subsidies in violation of existing trade law. As a result of this finding, Commerce announced a preliminary determination of a countervailing duty of 219.63% that will be imposed on each Bombardier C-Series aircraft imported into the United States.

“Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing’s global supply chain. Early next month, Commerce is expected to confirm the magnitude of the illegal dumping and announce additional duties associated with that finding.

“Global trade works only if everyone plays by the rules that we’ve all endorsed to ensure fair competition, as adjudicated by independent national and international bodies. This dispute has nothing to do with limiting innovation or competition, which we welcome. Rather, it has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements.”

Bombardier has countered by describing the decision is “absurd” claiming that Boeing’s motive for raising the case with the U.S. Department of Commerce is an attempt to throttle sales of a superior aircraft.

“We strongly disagree with the Commerce Department’s preliminary decision. The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs,” a spokesperson for the Canadian company said. “This result underscores what we have been saying for months: the U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition and prevent U.S. airlines and their passengers from benefiting from the C Series.

“The simple truth is that Bombardier created a superior aircraft that is more efficient, more comfortable, and quieter. The C Series serves a market segment not supported by any U.S. manufacturer. Delta wants to bring this remarkable new aircraft to the U.S. flying public. Boeing wants to prevent U.S. passengers from realising these benefits, irrespective of the harm that it would cause to the U.S. aerospace industry and the cost to airlines and consumers.

“The U.S. government should reject Boeing’s attempt to unfairly tilt the playing field in its favour and to impose an indirect tax on the flying public through unjustified import tariffs.”

A further ruling on the case is expected from the International Trade Commission next year. The commission will have to decide whether Boeing has suffered any commercial damage from the sales of the C Series to the United States.

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