The conflict between the United States and Canada in the dispute over government subsidies to aerospace is on a scale disproportionate. This Wednesday, the u.s. department of Commerce has imposed tariffs of nearly 220% on the Bombardier CSeries aircraft following a complaint from Boeing, accusing the canadian manufacturer to benefit from subsidies, undue. It is a preliminary decision which will be applied only if the Commission u.s. international trade (ITC) gave reason to Boeing in its final judgment expected in 2018.
Large orders for C-Series by Delta
Boeing accuses Bombardier of having sold its CSeries aircraft at a loss last year in the United States through government grants in Canada. The american company stated that the order of 75 CSeries, a plane with 110 to 130 seats, passed in April 2016 by Delta has been won by Bombardier with business methods unfair.
Bombardier said he is “totally in disagreement” with the decision of the department of Trade, deeming it “absurd” the magnitude of the penalty imposed. The department of Commerce did not specify how it had calculated the customs duties of 219,63%. The chief executive officer of Delta, Ed Bastian, said he did not expect to see the us authorities impose fees, exorbitant aircraft produced by Bombardier. The demand for Boeing is “absurd”, he tried, calling to the claim of the american company “hypocrisy ultimate”.
Boeing had no plane in the range requested by Delta
To convince the ITC, Boeing must prove that the business practices of Bombardier brought him injury, although he has not presented airline competitor to the CSeries for the control of Delta, says Dan Pearson, a former president of the ITC, who thus expresses his doubts on the outcome of the procedure. “Boeing had no aircraft of 100 seats in its lineup to compete on a request for an aircraft of 100 seats. Bombardier has, however, an aircraft of this category “, explained in fact in our columns in June, Fred Cromer, president of Bombardier Commercial Aircraft. Boeing would have offered its B737-700.
“Not a bolt of an aircraft Boeing will not come to Canada”
The american decision aroused the ire of the authorities in canada and québec. The Prime minister of Quebec, where Bombardier is a major employer, Philippe Couillard, has asked Ottawa to ensure that “not a bolt, not a part, not a plane from Boeing,” not be allowed to enter Canada as long as the litigation would not have been set.
“Boeing may have won a battle, but let me tell you that the war is far from over. And we will win”, he said to the press, denouncing an “attack” against Quebec and against Canada on the part of the United States. The government of Quebec has invested a billion into the CSeries program, said Philippe Couillard, asserting that Bombardier had not touched “a penny” of public subsidies.
No control of F-18 for Ottawa?
In Ottawa, canadian Prime minister Justin Trudeau stressed that his government was “disappointed, and I will continue to fight for good jobs for canadians.” The canadian minister of Trade, François-Philippe Champagne, spoke a decision “deplorable”. Recently, the canadian government had indicated that if Boeing was pursuing his complaint against Bombardier, there would be no purchase of F-18 by Canada.
This trade dispute could have repercussions to the Uk, Bombardier is the top industrial employer in Northern Ireland. The british authorities said Wednesday that Boeing could lose defense contracts in the United Kingdom as the result of the litigation.
“The government will continue to work with the company to protect jobs, vital in Northern Ireland”, she added.
“This dispute has nothing to do with a desire to limit innovation or competition, that we feel welcome. Rather, it has completely to do with the fact of being on an equal footing and to ensure that the aerospace companies comply with the trade agreements”, has responded to Boeing in a press release.