May threatens US with trade war

"We will be doing everything we can to ensure that we can see those [Bombardier] jobs being guaranteed in future."

British Prime Minister Theresa May

BRITAIN: British Prime Minister Theresa May has threatened a trade war with the United States after it slapped punitive tariffs on British-built aircraft, casting doubt on a key plank of her Brexit strategy.

The US Department of Commerce decided that Bombardier aircraft, built in Northern Ireland, should be subject to 219 per cent import duty, after American aviation company Boeing complained that Bombardier had benefited from unfair state aid.

The British Government responded by warning that Boeing’s behaviour ‘‘could jeopardise’’ future Ministry of Defence contracts for its aircraft.

May has appealed directly to US President Donald Trump to intervene in the dispute, which has dented her hopes of signing a postBrexit free trade deal with the US.

The row has also put her Conservative Party’s relationship with Northern Ireland’s Democratic Unionist Party (DUP) under strain, as Bombardier employs more than 4000 people at its Belfast factories.

May said yesterday she was ‘‘bitterly disappointed’’ with the decision to propose an interim tariff of 219 per cent on the importation of Bombardier C-Series jets to the US.

She said Boeing’s long-term partnership with the government was being ‘‘undermined by this behaviour’’.

‘‘We are very clear about the importance of Bombardier and the importance of those jobs in Northern Ireland, and we will be doing everything we can to ensure that we can see those jobs guaranteed in future.’’

Echoing May’s comments, Defence Secretary Sir Michael Fallon said: ‘‘This is not the kind of behaviour we expect from a longterm being partner. We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters, and they will also be bidding for other defence work, and this kind of behaviour clearly could jeopardise our future relationship with Boeing.’’

May has ordered ministers to ‘‘engage intensively’’ with Boeing and the Trump administration to try to resolve the matter.

The dispute centres on a Boeing complaint that the jets were being sold in the US at low prices, after ‘‘unfair’’ state subsidies from Britain and Canada helped Canadianowned Bombardier win an order for up to 125 aircraft with American airline Delta.

The tariffs will only take effect if the US International Trade Commission rules in Boeing’s favour in a final decision expected next year. But the interim tariffs were recommended despite May asking Trump to intervene.

DUP leader Arlene Foster insisted that the government challenge the ‘‘unjustifiable’’ ruling. Foster, upon whose party the Government relies to secure key Commons votes, has repeatedly pressed May on the issue.

‘‘Unfortunately, it’s not a surprise,’’ she said. ‘‘What we must do now is to continue to work with our own government, with the American government, with the Canadian government, in trying to get Boeing to see sense.

‘‘Obviously, we are very concerned about the jobs here in Belfast and Northern Ireland.’’

Wilbur Ross, the US commerce secretary, said: ‘‘The US values its relationships with Canada, but even our closest allies must play by the rules. The subsidisation of goods by foreign governments is something that the Trump administration takes very seriously.’’

A spokesman for Bombardier described the proposed duty as ‘‘absurd’’.

Boeing said: ‘‘This dispute ... has everything to do with maintaining a level playing field and ensuring that companies abide by trade agreements.’’

Allie Renison, head of European Union and trade policy for Britain’s Institute of Directors, said the battle could be a ‘‘taste of things to come’’ when Britain took back responsibility for trade relations post-Brexit.

‘‘After Brexit, we’ll have to make decisions and be the subject of decisions, including from the US, on tariffs, and we’d have to work out how we’d respond.’’

The row overshadowed the launch of the Institute for Free Trade, a new think tank that calls for Britain to reduce trade barriers with non-EU countries after Brexit.