U.S. Department of Commerce Takes Punitive Measures Against Bombardier
Jackie Reddy September 29, 2017
The department has levied preliminary duties against the Montreal-based manufacturer after Boeing accused it of dumping its CSeries craft on the U.S. market at below value.
As tension between Bombardier and Boeing escalates, the former manufacturer has been hit with preliminary anti-subsidy duties by the U.S. Commerce Department, Reuters reports. These punitive measures were taken after Boeing accused Canadian authorities of subsidizing Bombardier’s CSeries aircraft.
Boeing has said that, due to these subsidies, these craft were offered below value on the American market back in 2016. However, the levying of these duties is only a preliminary measure by the department; the news outlet reports that these will be enforced only if the U.S. International Trade Commission (ITC) favors Boeing in its decision. This is due in 2018.
Bombardier has taken issue with the department’s actions. “We strongly disagree with the Commerce Department’s preliminary decision,” it said in an official statement.
The department has proposed to levy a 219.63 percent duty against Bombardier, but has not provided any insight into how it has calculated this figure. The Montreal-based manufacturer criticized the measures, calling them “absurd”.
If these duties are enforced, it is thought that they could more than triple the cost of this type of plane to about $61 million per craft. The department’s decision comes just as the U.S, Canada and Mexico have begun talks to update the North American Free Trade Agreement (NAFTA).
However, an unnamed source knowledgeable about the Canadian government’s stance on the topic has said that this issue will not have an impact on these negotiations. “This in no way is part of our conversation,” the source was quoted as saying.
Chrystia Freeland, Canada’s foreign affairs minister, has said that her government takes issue with the decision made by the U.S. government. “This is clearly aimed at eliminating Bombardier’s CSeries aircraft from the U.S. market,” she said.
Boeing has stated that the spat with Bombardier “has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements.”
[Photo: Shutterstock]
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So Muielenberg (Boeing CEO) sits on D Trumps business council and gets some nonsense tariff placed on a competitor. That really drains the swamp.
BA isn't going to get fooled, again. They let Airbus, heavily underwritten by European governments (and not with defense contracts, just shoveling money to them) rise unopposed to pose a substantial threat to BA, not to mention McDonnell-Douglas and Lockheed (remember them?). This isn't so much about Bombardier, although the circumstances are similar, but it IS all about China, with a state-owned enterprise determined to burn their citizens' money to establish itself as a global competitor. Should the Bombardier countervail survive all the way to the World Trade Organization, there is a solid foundation for action to keep their aircraft out of American (and other nations') skies.
Icecat: You cant institute duties if you don't produce the product. BBD doesnt produce anything close to a 77W.
Thought I read the EXIM bank in Washington is jokingly described as the bank of Boeing and that Boeing has received US $14B in subsidies over the years. Pot calling the kettle black.
Perhaps the government in Ottawa should prevent their airlines from purchasing Boeing aircraft..It's not like that Boeing hasn't been selling the end of line 77W and 737-800's at below market rate, but actually being subsidized by federal contracts they obtained.