Bombardier fights back after new duty put on CSeries sales to U.S.

Bombardier Inc. accused the Trump administration of overreach by siding with Boeing in its bid to shut the CSeries commercial jet from the world’s largest airline market by effectively quadrupling the price of any of the planes sold in the United States.

“It represents an egregious overreach and misapplication of the U.S. trade laws in an apparent attempt to block the CSeries aircraft from entering the U.S. market,” the Montreal-based transportation manufacturer (TSX:BBD.B) said in response to an additional 80 per cent anti-dumping duty.

Bombardier said the Commerce Department has ignored aerospace industry realities, noting that Boeing’s own practice of selling aircraft below production costs for years after launch would fail the test used against the CSeries

“This hypocrisy is appalling, and it should be deeply troubling to any importer of large, complex, and highly engineered products,” it said.

The decision intensifies political pressure on NAFTA negotiators ahead of next week’s resumption of talks among Canada, Mexico and the U.S.

The U.S. Commerce Department added 79.82 per cent to 219.63 per cent in preliminary countervailing tariffs it announced last week, once deliveries to Delta Air Lines begin next year.

“The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship,” stated Commerce Secretary Wilbur Ross.

“We will continue to verify the accuracy of this decision, while (doing) everything in our power to stand up for American companies and their workers.”

Foreign Affairs Minister Chrystia Freeland said she was extremely disappointed, but not surprised given the “baseless and absurdly high” duties last week.

“Boeing is manipulating the U.S. trade remedy system to prevent Bombardier’s aircraft, the CSeries, from entering the U.S. market despite Boeing’s admission that it does not compete with the C Series,” she said in a statement.

“Our government will continue to vigorously defend the interests of the Canadian aerospace industry and our aerospace workers against irresponsible and protectionist trade measures.”

Several U.S. senators and House members also expressed their unhappiness, calling the decision “shortsighted” because it threatens thousands of jobs across the country supported by Bombardier and its suppliers.

The latest duty matches the amount originally proposed by Boeing, before it revised its request to 143 per cent because of Bombardier’s refusal to provide certain information to the Commerce Department.

The Chicago-based aircraft giant said it welcomes the decision affirming its view that Bombardier sold the CSeries to Delta at prices below production cost to illegally grab market share in the single-aisle airplane market.