Addendum
Blow to Boeing as C Series 300% duty nullified
February 1st 2018
In a decision that surprised many in the industry, the U.S. International Trade Commission (USITC) announced on January 26 that it had voted unanimously in favour of Bombardier in a dispute with Boeing over subsidies for the Canadian manufacturer’s new C Series jet. Read More » At press time, Boeing had yet to announce if it would take its case to the U.S. courts.
Boeing had argued its business was harmed when Delta Airlines received unrealistically low prices for its order of 75 C Series jets, with options for 50 more, in 2016. The global aerospace group said the deal could only have been possible because the Canadian government was subsidising the Montreal-headquartered company.
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In a very public blow to the U.S. Commerce Department, the USITC said: “Today it was determined that a U.S industry is not materially injured or threatened with material injury by reason of imports of 100 to 150 seat large civil aircraft from Canada that the the U.S. Department of Commerce has determined as subsidized and sold at less than fair value.
“As a result of the USTIC’s negative determinations, no anti-dumping or countervailing duty orders will be issued,” it said.
The ruling made void the 299.45% tariff the U.S. Department of Commerce had imposed on Bombardier last October as a result of Delta’s order for the Canadian aircraft.
Boeing said in a statement it was disappointed by the decision because “it did not recognize the harm Boeing has suffered from billions of dollars in illegal government subsidies”. It added it would continue to record situations that damaged its business through illegal dumping and illegal subsidies.
The Canadian government has made a significant investment in Bombardier’s aerospace development, including a US$280 million top up injection from a government aerospace and transport investment fund. From 2013, Bombardier has been proceeding through a painful restructuring of its aerospace and rail businesses that resulted in massive job losses across the group.
Despite leaner operations, Bombardier, and in particular the C Series program, has struggled when projected orders for the jet failed to materalise in the last 18 months.
In October last year, Airbus announced it would acquire 50.01% of the Bombardier C Series program and said it would move production of the 100-plus seat jet to the Airbus production facility in Mobile in Alabama.
