BCN-01 US trade commission blocks 300% tariffs on Bombardier CSeries planes

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US trade commission blocks 300% tariffs on Bombardier CSeries planes

WASHINGTON, Jan 27, 2018 (BSS/AFP) – A bipartisan US trade panel on Friday
blocked the government’s decision to impose nearly 300 percent punitive
tariffs on airplanes manufactured by Canada’s Bombardier, in a dispute that
has inflamed relations with Ottawa.

The US International Trade Commission voted 4-0 that there was no injury
to US manufacturers, which effectively forces President Donald Trump’s
Commerce Department to reverse course on the retaliatory measures designed to
protect Boeing.

The failure to back up the Commerce Department was a rare move by the
panel, but it will not release an explanation of its reasoning until March.

Boeing filed a trade complaint after Delta Air Lines placed an order for
75 of the CSeries jets, which can seat between 100 and 150 passengers, and
found a receptive ear in the Trump administration, which has ratcheted up
adversarial trade actions.

Although none of the planes have been delivered, the Commerce Department
ruled that the aircraft benefited from unfair subsidies and were sold below
cost, allowing Bombardier to have an advantage over Boeing.

“Today’s decision is a victory for innovation, competition and the rule of
law. It is also a victory for US airlines and the US traveling public,”
Bombardier said in a statement shortly after the vote.

Canadian Foreign Minister Chrystia Freeland said Ottawa was likewise “very
pleased” with the ruling.

“The government of Canada will always vigorously defend the Canadian
aerospace industry and its workers against protectionist trade policies,” she
said in a statement.

Britain’s Prime Minister Theresa May described the decision as “good news
for British industry.”

“Bombardier and its innovative workforce play a vital role in the Northern
Ireland economy,” she wrote on Twitter.

The ruling comes as fraught talks are underway this week in Montreal to
renegotiate the North American Free Trade Agreement between Canada, Mexico
and the United States.

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– ‘Disappointed’ –

Shares in Bombardier jumped higher on the news, finishing up more than 15
percent in Toronto.

Boeing said the company was “disappointed” with the decision by the
commission, which “did not recognize the harm that Boeing has suffered from
the billions of dollars in illegal government subsidies” Bombardier received.

“Those violations have harmed the US aerospace industry, and we are
feeling the effects of those unfair business practices in the market every
day,” it added.

A Boeing spokesman told AFP the company would review the commission’s
reasoned decision early next month before deciding future steps.

The company could appeal the ruling in US federal courts.

Bombardier argued that Boeing suffered no harm because it did not offer a
comparable sized jet to compete for Delta’s business.

In addition, the Canadian firm has since struck a bargain with European
manufacturer Airbus, giving the latter a controlling stake in the CSeries
jets and allowing them to be manufactured duty-free in Alabama.

“With this matter behind us, we are moving full speed ahead with
finalizing our partnership with Airbus,” Bombardier said.

“Integration planning is going well and we look forward to delivering the
CSeries to the US market.”

“We are happy to see that the ITC concurred with our views,” Airbus group
CEO Tom Enders told AFP.

“We will carry on full steam with our C series project, focusing on
addressing the needs of our airline customers and creating more and new,
high-skill manufacturing jobs in the US.”

The aircraft case is one of several that have soured the Trump White
House’s relations with Canada, which last month lodged a wide-ranging
complaint with the World Trade Organization, challenging US moves to impose
punitive tariffs.

As tensions turned raw last year, the Canadian government scrapped plans
to buy 18 Super Hornet fighter jets, which are manufactured by Boeing.
The ITC is an independent federal agency and its commissioners are
balanced between Republicans and Democrats, although it currently has only
four instead of the usual six members.

Unlike the Commerce Department, ITC investigations determine whether US
industry is injured or threatened with harm by the imports in question. Both
agencies have to rule in favor before punitive tariffs can take effect.

BSS/AFP/HR/0920