US Bombardier tariff threatens United Kingdom aerospace jobs

Boeing has alleged that Bombardier sold its new C Series single-aisle aircraft below cost price to US carrier Delta
Boeing has alleged that Bombardier sold its new C Series single-aisle aircraft below cost price to US carrier Delta

28 September, 2017

Boeing has accused Bombardier of selling its biggest jet in the less than fair value, while benefiting from unfair government subsidies in Canada. Canadian Prime Minister Justin Trudeau has said the government won't buy Boeing military jets unless the company drops its case against Bombardier.

The Commerce Department announcement, which centered on Boeing's claim that the Canadian jet maker had received unfair government subsidies for its products, was the first in a series of rulings on the duties that are to be charged to Bombardier's products, rulings that could be reversed in months to come.

Boeing had recommended a heavy tariff on the C Series, paid by Delta or any US airline importing the aircraft in what would be considered a major blow to Bombardier and its ability to establish the new jet in the world's largest aviation market.

Prime minister Theresa May's office states that it is "bitterly disappointed" by the initial ruling by the US Department of Commerce, which found that the CSeries received "countervailable subsidies" of just under 220%.

The UK government and trade unions fear the ruling could put the jobs of 4,100 staff in Northern Ireland at risk.

"We have had a long-term partnership with Boeing, worked with Boeing over the years, and I think this is no way to operate in terms of such a long-term partnership".

The Department of Commerce's enforcement and compliance unit is responsible for vigorously enforcing United States trade laws and does so through an impartial, transparent process that abides by worldwide rules and is based exclusively on factual evidence, its statement said. Experts said the Canadians could technically import the jets itself through a local subsidiary in a way that would be neutral for Delta.

She said her party would use its influence in government to protect the jobs.

Around 1,000 workers in the east Belfast factory are directly employed on the C-Series project, but the firm has always stated that the future of the entire site relies on the success of the C-Series.

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Consequently, Fallon delivered the clear message to Boeing that this could jeopardise lucrative defence contracts within the UK. So if Bombardier goes, they're at risk too.

Bombardier supports hundreds of other jobs through its suppliers and has been a major employer in Northern Ireland for nearly 30 years.

Earlier Mrs May, who has directly lobbied US President Donald Trump over the dispute, expressed regret at the decision. "It's high time she woke up".

He added that Boeing has received "tens of billions of dollars" in subsidies from the American government over several decades, and described the US government decision to impose duties as "really surprising".

Ms May's reaction to the ruling will be seen as a test of her government's ability to guide the United Kingdom economy into its new trade relations after Brexit.

Ross Murdoch, the GMB union's national officer, said the ruling was a "hammer blow" to Belfast, where Bombardier makes aircraft wings and fuselages.

"Even our closest allies must play by the rules", U.S. Commerce Secretary Wilbur Ross said in announcing the decision on Canadian jets with 100 to 150 seats.

"This result underscores what we have been saying for months: the U.S. trade laws were never meant to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition", it added.

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