February 25, 2018

Main » Boeing suffers blow as trade court blocks 300% tariff against Bombardier

Boeing suffers blow as trade court blocks 300% tariff against Bombardier

28 January 2018

The carrier was one of at least three USA operators - the others were Spirit Airlines Inc. and Sun Country Airlines - that wrote to the Commerce Department and the International Trade Commission previous year to express support for Bombardier.

Friday's vote deals a blow to Chicago-based Boeing Co.

As part of that deal, Airbus is planning to open a new assembly line for the C Series jet in Mobile, Alabama, where it builds A320 family aircraft for its US customers.

"I'm shocked", said Chris Murray, an AltaCorp Capital analyst in Toronto.

It also alienated top customer Delta Air Lines, blocked from buying the CSeries by the proposed tariffs.

Delta argued that it wasn't interested in Boeing's smallest jet, the 737 Max 7, and the US plane maker had offered it used Brazilian regional jets.

Shares gained more than 15 per cent after the ruling, closing at $3.54.

In a statement, Bombardier said the ITC's decision was a "victory for innovation, competition, and the rule of law".

The ITC's decision caps an eight-month trade dispute that kicked off when Boeing filed a petition with United States authorities in April 2017. "It shows that sober business is still prevailing and it does not change our project; we will go ahead full throttle", Enders said. Airbus tweeted a picture of the smiling CEOs and other executives raising a toast to the decision. While Marcil said he didn't know whether that swayed the USITC, as the final decision has not yet been released, he said the Airbus deal was still the right thing to do. "Those violations have harmed the USA aerospace industry, and we are feeling the effects of those unfair business practices in the market every day".

Boeing said Bombardier's cheap planes ended up cutting into the USA market for similar Boeing planes.

"There is a strong possibility that the commission will decide against Bombardier because there is a tendency in the current climate for all tribunals and agencies involved in trade to take protectionist decisions", he said in an interview.

"This has been a very hard time for those staff who faced an uncertain future". "There haven't been a lot of successful challenges".

How tough he talks on trade may swing markets, which became more nervous about a potential trade war after the US imposed tariffs on imports of solar panels and washing machines, hitting Chinese and South Korean companies. That stirred fears that more restrictive trade measures will follow.

"Boeing's allegations made against Bombardier were unfounded", Canada's Industry Minister, Navdeep Bains, said in a Twitter message.

"Boeing's previous attempts to exclude Embraer from the ITC's analysis has resulted in a fundamentally flawed assessment of the market that we believe needs to be addressed", he wrote in an email.

After the ITC's decision May said: "I welcome this decision, which is good news for British industry".

If the ITC finds in Boeing's favour, the tariffs will be applied, undermining around 1,000 in Belfast where the C Series wings are produced.

Bombardier won its case against United States proposals to impose tariffs of 292% on its imports to America - a result which could safeguard thousands of jobs in Belfast.

Boeing suffers blow as trade court blocks 300% tariff against Bombardier