US tax on Canadian jet could cost thousands of jobs in UK
AMERICA has imposed a tax of nearly 220% on a new model of passenger jet partly manufactured in the UK that will triple its cost for US airlines.
Theresa May and Carwyn Jones have both criticised the prohibitive tax on the Bombardier jet, which could put thousands of British jobs at risk.
In Wales, there are 160 firms in the aerospace sector employing 23,000 people – many of which supply parts for aircraft wings such as those made by Canadian firm Bombardier at its factory in Northern Ireland.
About 1,000 jobs are directly linked to the Bombardier C-Series, the wings of which are made at a purpose-built £520m factory at Queen’s Island in Belfast.
Many other smaller firms in Northern Ireland and the rest of the UK make the components for the wings.
The Prime Minister has said she is “bitterly disappointed by the decision”, while the Welsh First Minister said: “So much for a free trade deal with the US. So much for the special relationship. A Brexit fantasy wrecked.”
The US Department of Commerce ruling could potentially jeopardise a major order made last year from US airline Delta – a $5.6bn (£4.15bn) deal for up to 125 of the jets.
Bombardier said its major US rival Boeing was seeking to use US trade laws “to stifle competition”.
Welsh Labour MP Owen Smith – the Shadow Northern Ireland Secretary – also questioned whether it would make be easier to strike free trade agreements post-Brexit.
Bombardier is a leading manufacturer of both planes and trains, and employs more than 4,000 people in Belfast.
But other businesses in the UK are supported through the manufacturer’s supply chain, according to trade unionists.
Officials have accused Mrs May of being “asleep at the wheel” as unions warned that thousands of jobs could be put at risk by the US move.
Mrs May had lobbied US President Donald Trump over the dispute, which was sparked by complaints from rival Boeing that Bombardier received unfair state subsidies from the UK and Canada, allowing the sale of airliners at below cost price in America.
The Democratic Unionist Party (DUP), which the Tories rely on to swing key Commons votes for the Government, has repeatedly pressed the Prime Minister over the issue.
The controversial US decision came as Foreign Secretary Boris Johnson was using the launch of a new think-tank on Wednesday to push the case for global free trade.
Announcing the regulator’s preliminary finding on Tuesday, US Secretary of Commerce Wilbur Ross said the subsidisation of goods by foreign governments was something that President Trump’s administration “takes very seriously”.
Bombardier labelled the determination “absurd”, while in its response the UK Government said the statement was “disappointing” and pledged to defend British interests “at the very highest levels”.
However, unions warned that the preliminary determination was “unlikely” to be overturned by Mr Trump, who has been clear in his aim to fiercely protect American jobs, casting a shadow over the industry’s future in Northern Ireland.
A spokeswoman for Aerospace Wales said three Welsh firms supplied Bombardier.
He said: “Tritech Group and Gardner Aerospace are approved suppliers for Bombardier, but it is just one of their very many customers, so I would not expect the Bombardier announcement today to have any real effect on their businesses.
“Magellan Aerospace, with a large site in Wrexham, acquired a business in Northern Ireland in 2012 so that it could expand their European operations. I would expect their Northern Ireland business to be affected, but not so much of their business in Wales, roughly 90% of which is Airbus work.”
DUP leader Arlene Foster pressed Mrs May to raise the issue with Mr Trump when the two met in New York earlier in September.
Mrs Foster said the DoC’s determination was “very disappointing”, but added that it was not the end of the process.
“The C-Series is a hugely innovative aircraft that is vital to Bombardier’s operations in Belfast,” she said.
“It is this innovation that sets the C-Series apart and it is not in direct competition with Boeing.”