US backs 300% in duties on Bombardier after Boeing complaint

The decision could effectively halt sales of Bombardier’s innovative new plane to US airlines.

American Free Trade Agreement.

After the first duty was announced on Sept. 26, Canada and Britain threatened to avoid buying Boeing military equipment, saying duties on the CSeries would reduce US sales and put thousands of Bombardier jobs in their countries at risk.

“This is a disappointing statement but hardly surprising given last week’s preliminary ruling sided with Boeing,” a British government spokesman said on Saturday.

“We continue to make all efforts alongside the Canadian government to get Boeing to the table to resolve the case.”

Bombardier shares were last up 0.5% to C$2.20. Some analysts said the muted response reflected a view that the penalties might not actually be applied.

Boeing, the world’s largest plane maker, hailed the decision and hinted at an alternative for Bombardier.

“These duties are the consequence of a conscious decision by Bombardier to violate trade law and dump their CSeries aircraft to secure a sale,” Chicago-based Boeing said in a statement.

“Bombardier always has the option of coming into full compliance with trade laws,” Boeing added.

Canada’s foreign ministry said Boeing was “manipulating the US trade remedy system” to keep the CSeries out of the country.

Canada is in “complete disagreement” with the decision and would keep raising concerns with the United States and Boeing, Foreign Minister Chrystia Freeland said in a statement.

To win its case before the ITC, Boeing must prove it was harmed by Bombardier’s sales, despite not using one of its own jets to compete for the Delta order.

Bombardier said it was confident that the ITC would find Boeing was not harmed, calling the Commerce Department decision a case of “egregious overreach.”

Delta said the decision was preliminary and it was confident the ITC “will conclude that no US manufacturer is at risk” from Bombardier’s plane.

Boeing has said the dispute was about “maintaining a level playing field” and was not an attack on Canada or Britain.

US Commerce Secretary Wilbur Ross said the decision affirmed Trump’s “America First” policy.

“We will ... do everything in our power to stand up for American companies and their workers,” Ross said in a statement.

But the industry is not so simple. More than half of the purchased content of each CSeries aircraft comes from US suppliers, Bombardier has said.