There can be no winners in a trade war of this scale
Perhaps the most shocking aspect of the Bombardier row is that it has taken this long for a full-blown international trade war to become a genuine threat. The decision by the US Department of Commerce to slap a tariff of 220pc on imports of the plane maker’s C-series aircraft into America, in response to a complaint from Boeing, is the culmination of a storm that has been brewing for almost three decades.
It is a bitter blow for the Canadians, coming in the same week that their long-standing influence in the rail market was severely dented by the announcement of a merger between two of its biggest rivals, France’s Alstom and Germany’s Siemens.
However, Canada is far from the only loser from this spat. Once again, our embattled Prime Minister has been out-witted on the international stage at a time when she should be demonstrating resolve and leadership.
This was the moment to exploit the so-called “special relationship” with America to help protect thousands of jobs in Northern Ireland where Bombardier produces wings for the C-series.
Instead, as the row spectacularly unfolded, the latest round of Brexit negotiations were taking place and Theresa May was awkwardly singing the praises of free-market capitalism in speech at the Bank of England.
Now she must work out how to keep the Government’s DUP allies in Northern Ireland on side while resisting the temptation to lash out at Boeing, a more important foreign investor than Bombardier, with four times as many employees in the UK.
Labour is demanding retaliation but that would be ill-advised. Boeing’s relationship with the British military dates back nearly 80 years and involves the sale of vital equipment like Chinook helicopters and Apache attack helicopters. Inflaming tensions would surely end any chance of forging a vital post-brexit free trade deal with America in the near future. Frantic behind-the-scenes diplomacy is much more likely than Boeing being frozen out of future defence contracts.
Still, that doesn’t mean the US emerges unscathed.
China and Mexico were thought to be the targets of Donald Trump’s protectionist “America First” policy. Instead, with characteristic shortsightedness and confusion, he has risked long-standing relations with two of his closest Anglo-saxon allies despite their desperate pleas to resist action. While Britain’s response is likely to be little more measured, Canada is threatening to hit back, halting the purchase of Boeing’s F-18 Super Hornets if the company continued to pursue its challenge against Bombardier.
In the end the US International Trade Commission may rule that the duty is unjustified. If it doesn’t, then the World Trade Organisation could have the ultimate say. Sense should prevail because there can be no winners in a trade war of this scale.
‘Once again, our embattled PM has been out-witted on the world stage’
Dyson’s battle too far
James Dyson is one of a handful of UK entrepreneurs whose every move is heralded as a stroke of genius. Having built a first-class manufacturing empire out of nothing, the billionaire can genuinely claim to be one of Britain’s most talented and successful inventors.
Refreshingly, he acknowledges that the hits are outweighed by the misses – progress comes only if you learn from your mistakes Dyson says.
Still, the 70-year-old’s next move threatens to be his most costly. Last week he unveiled plans to gatecrash the electric car revolution. He has a battalion of 400 engineers working on a model that is on course to be ready for 2020.
Even by Dyson’s standards this is highly ambitious. He is also horribly late to the party. Every major car manufacturer in the world is currently chasing electric domination. Tesla, Nissan, Renault, Volvo and BMW already have models on the market, while Jaguar, Mercedes, and VW are betting big on electric.
There is no question that Dyson has the know-how but he lacks the financial might to mount a serious challenge. £2bn has been set aside but that is a splash in the ocean against the car giants and Apple and Google.
The inventor has a brilliant track record of taking on the big boys – the Dyson Dual Cyclone was the UK’S fastest ever selling vacuum cleaner – but I fear this is a David and Goliath battle he won’t win.