in Aerospace

US Dept. of Commerce's preliminary ruling imposes import tariff on Bombardier's C-Series

Posted 29 September 2017 · Add Comment

The US Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the countervailing duty (CVD) investigation of 100- to 150-seat large civil aircraft from Canada, finding that exporters of this merchandise received countervailable subsidies of 219.63%.



Above: Bombardier, Belfast.

“The US values its relationships with Canada but even our closest allies must play by the rules,” said Secretary Ross. “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.”

Although Canadian civil aircraft subject to this investigation have not yet been imported, an April 2016 press release announcing the sale of Canadian civil aircraft to a US airline valued the order to be in excess of $5 billion. The petitioner is The Boeing Company.

Bombardier subsequently issued a statement on the US Department Commerce CVD decision: “We strongly disagree with the Commerce Department’s preliminary decision. The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs. This result underscores what we have been saying for months: the US trade laws were never intended to be used in this manner and Boeing is seeking to use a skewed process to stifle competition and prevent US airlines and their passengers from benefiting from the C Series."

In the statement, Bombardier said that "The C Series serves a market segment not supported by any US manufacturer. Looking beyond today’s and next month’s preliminary decisions, the International Trade Commission will determine next year whether Boeing suffered any injury from the C Series.”

ADS Chief Executive Paul Everitt said about the decision: “This ruling is extremely disappointing and unsettling for Northern Ireland’s aerospace industry. However, it is a preliminary ruling and there is still a long way to go in this process.

"The UK Government must now work with the Canadian and US Governments to take all appropriate steps in the coming weeks and months to find an amicable resolution to this dispute, which is not in the interests of the global aerospace sector.

“Bombardier is an important part of the UK aerospace industry and especially in Northern Ireland where it employs thousands of people. The company has high potential for future growth as demand for new aircraft remains high, and the Belfast site works with a supply chain of more than 800 companies in the UK and Ireland.”

Boeing also issued a statement, in which it said: “As a result of this finding, Commerce announced a preliminary determination of a countervailing duty of 219.63% that will be imposed on each Bombardier C-Series aircraft imported into the United States. Subsidies enabled Bombardier to dump its product into the US market, harming aerospace workers in the United States and throughout Boeing’s global supply chain.

"This dispute has nothing to do with limiting innovation or competition, which we welcome. Rather, it has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements. The process that will continue to play out over the next several months at the International Trade Commission and Commerce is the longstanding, transparent course for examining and addressing situations where products are ‘dumped’ into the United States at below-cost prices for the purposes of gaining market share.”


 

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