May threatens US with trade war
PM appeals to Trump and warns of retaliation as US puts punitive tariffs on aircraft firm Bombardier
THERESA MAY threatened a trade war with the United States last night after it slapped punitive tariffs on Uk-built aircraft, casting doubt on a key plank of her Brexit strategy.
The US Department of Commerce decided Bombardier aircraft, built in Northern Ireland, should be subject to 219 per cent import duty after the American aviation company Boeing complained that Bombardier had benefited from unfair state aid.
The Government responded by warning that Boeing’s behaviour “could jeopardise” future Ministry of Defence contracts for its aircraft.
The Prime Minister has appealed directly to Donald Trump, the US president, 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 the Conservatives’ relationship with the DUP under strain, as Bombardier employs more than 4,000 people at its Belfast factories. Mrs May said yesterday she was “bitterly disappointed” with the decision of the US Department of Commerce to propose an interim tariff of 219 per cent on the import of Bombardier C-series jets to the US.
She said that 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 being guaranteed in future,” she added. Echoing Mrs May’s comments, Sir Michael Fallon, the Defence Secretary, said: “This is not the kind of behaviour we expect from a long-term 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.”
Mrs May has ordered ministers to “engage intensively” with Boeing and the US 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 the UK and Canada had helped Canadian-owned Bombardier win an order for up to 125 aircraft with the 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 Mrs May asking Mr Trump to intervene.
Arlene Foster, the DUP leader, insisted the Government must challenge the “unjustifiable” ruling. Ms Foster, upon whose party the Government relies to secure key Commons votes, has repeatedly pressed Mrs May on the issue. She told Sky News: “Unfortunately, it’s not a surprise. 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 in a statement: “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, and we will continue to evaluate and verify the accuracy of this preliminary determination.”
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 EU and trade policy for the Institute of Directors, told The Daily Telegraph the battle could be a “taste of things to come” when Britain takes back responsibility for trade relations post-brexit.
“It’s a little unhelpful news at the moment, given the US is meant to be our first port of call for trade,” she said. “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.”
Boris Johnson, the Foreign Secretary, told The Telegraph: “I hope it can be resolved speedily and obviously we’re very disappointed by the result. We will be looking at what we can do to ensure free and fair trade to make sure Bombardier gets a fair crack of the whip.”
Jeremy Corbyn also heaped pressure on the Government in his speech to the Labour Party conference in Brighton, saying: “If the special relationship means anything, it must mean that we can say to Washington: that way is the wrong way. That’s clearly what’s needed in the case of Bombardier, where thousands of jobs are at stake. A Prime Minister betting our economic future on a deregulated trade deal with the US might want to explain how 220 per cent tariffs are going to boost our exports.”
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. It is backed by Mr Johnson, who signalled again yesterday that he favours the shortest possible Brexit transition period.