U.S. hits Bombardier with new duties
The U.S. slapped duties on Bombardier’s showcase commercial jet for the second time in as many weeks, upholding Boeing Co.’s case that its Canadian competitor sold planes at less than fair value.
The Commerce Department imposed a preliminary import duty of 80 percent on Bombardier C Series aircraft based on its finding, according to an emailed statement Friday. The agency ruled last week that the Montrealbased plane maker, which invested more than $6 billion to develop the new C Series, benefited from unfair subsidies. The second round of import duties marks the latest blow for Bombardier, which received financial support from Quebec and Canada as its biggest jet came in two years late and about $2 billion over budget. The ruling is also bound to stoke tensions between the U.S. and two key allies, Canada and the U.K., which have expressed dismay with the Commerce Department.
Both charges — last week’s 220 percent countervailing duties and Friday’s anti-dumping restrictions — could be reversed by the U.S. International Trade Commission if the tribunal concludes that Boeing wasn’t injured by Bombardier’s jet program, a decision expected to be made next year. The Commerce Department also still needs to issue a final ruling in both cases.
Bombardier rose less than 1 percent to C$2.21 at the close in Toronto. The shares are 2.6 percent lower than their level before the initial Commerce Department ruling last week.
Canadian Foreign Affairs Minister Chrystia Freeland said she was “extremely disappointed” in the latest U.S. decision, vowing to defend the country’s aerospace industry against “irresponsible and protectionist trade measures.”
“These anti-dumping duties on Bombardier’s C Series aircraft unfairly target Canada’s highly innovative aerospace sector and its more than 200,000 workers,” Freeland said in a statement. The measures also “put at risk the almost 23,000 U.S. jobs that depend on Bombardier and its suppliers.”
The controversy is likely to hang over Prime Minister Justin Trudeau’s trip to Washington next week, where he is scheduled to discuss trade with President Donald Trump just as negotiators hold the fourth round of talks to amend the North American Free Trade Agreement. Trudeau has warned that his government won’t buy Boeing military jets unless the company drops the case.