U.S. is seeking stiff tariffs on Canadian jets

The U.S. government moved to impose tariffs on Canadian jetliners Tuesday when it ruled in favor of a complaint by U.S. aircraft maker Boeing that accused rival Bombardier of receiving unfair government subsidies.

The Commerce Department suggested the tariffs could be as high as 219%. The action threatens to further inflame trade tensions between the two North American neighbors. This year, the Commerce Department moved to impose new duties on the import of Canadian soft lumber.

Bombardier has sold aircraft to U.S. carriers for decades. But Boeing ’s complaint follows a multibillion-dollar deal struck between Bombardier and Atlanta-based Delta Air Lines for 75 C-series CS-100’s, a commercial airplane that seats about 100 people.

After the deal, Boeing formally asked the U.S. Commerce Department to investigate what it called illegal government subsidies and unfair pricing practices that have allegedly given the Canadian company an unfair advantage as it competes for business in the United States.

“Without bailout money from Ottawa and the Quebec provincial government [Bombardier] would probably be bankrupt,” said Loren Thompson, a defense consultant whose think tank gets funding from Boeing.

Bombardier is to begin delivering the planes next year, and any new duties would increase its costs. The exact amount of any new tariffs would probably not be finalized until early next year. Even then, Canada could pursue a case against the United States at the World Trade Organization.

Canadian Prime Minister Justin Trudeau suggested this month that his government might retaliate directly against Boeing. The Canadian military is considering whether to buy Boeing’s F-18 Super Hornets. .

“We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business,” Trudeau said at a news conference.