Bombardier, canola to benefit from Chinese tariffs on U.S.

MONTREAL — Bombardier Inc. stands to gain from Chinese retaliatory duties against U.S. small aircraft, but the outlook is mixed for Canada’s agricultural sector.

A 25 per cent tariff on aircraft weighing between 15 and 45 tonnes could prompt Chinese buyers to switch to Bombardier Global business jets from planes made by U.S. producer Gulfstream, said Richard Aboulafia of the Teal Group.

“One thing that’s pretty clear is that Gulfstream is a high priority target... that definitely helps Bombardier a lot,” he said in an interview.

The result could be Bombardier gaining a bigger piece of the Chinese market, which accounts for about five per cent of global business jet sales.

China says it imposed retaliatory tariffs after Washington imposed 25 per cent duties on US$34 billion of imports from China on Friday.

Aboulafia calls the Chinese action “a shot across the bow” to the American aerospace sector by targeting lower volume airplanes.

Canada’s largest agricultural crop could benefit from the trade dispute, said Jim Everson, president of the Canola Council of Canada.

“There is an increased interest in Canadian canola as a result of these tariff issues,” he said.

Canada produced 21 million tonnes of canola seed last year, of which 9.5 million was processed into oil and meal.