United States Rules In Favor Of Boeing, Slaps Bombardier With Tax

A Bombardier Global 7000 aircraft mock up is shown in Toronto on Tuesday

A Bombardier Global 7000 aircraft mock up is shown in Toronto on Tuesday

The U.S. Commerce Department on Wednesday finalized duties of almost 300 percent on passenger jets made by Bombardier, a win for Boeing, which lodged the complaint against its Canadian rival. If no injury is found, the ITC could terminate the Commerce Department's tariff.

US trade officials are expected to confirm massive tariffs on Bombardier planes Tuesday in a case that has inflamed relations between Washington and Ottawa.

In October, shortly after the preliminary tariffs were announced, Boeing's European archrival Airbus took a majority stake in the C-Series program, and announced the planes would be built at the Airbus plant in Mobile, Alabama.

The Bombardier CSeries jets are narrow-body commercial aircraft for medium-range routes, a category also served by Boeing with its 737 series and Airbus with the A320 series.

Canada's ambassador to the United States, David MacNaughton, warned that a positive finding of material harm to Boeing by the ITC could represent a possible violation of World Trade Organization agreements and prompt a more formal complaint with the global trade group.

But Bombardier argues that Boeing isn't threatened by the sales of the C Series because it doesn't sell an 100-seat airplane to suit the needs of airlines like Delta, which ordered 75 planes in April 2016 to update its fleet. Boeing argues that Bombardier signed a deal to sell its new single-aisle CS 100 planes with a price tag of just $19.6 million each, far below the $33.2 million construction cost, and a pittance compared with the list price of $79.5 million - though that amount is nearly never paid.

Bombardier calls Boeing's criticism unfounded, saying that the USA company's entire case has been overtaken by events.

"The fact is that the CSeries simply does not threaten Boeing", Bombardier said in a statement. "That's years of lost production and deliveries for Boeing, years of lost work for our employees, and years of lost work for our USA suppliers", Boeing Executive Vice President Kevin McAllister said.

The U.S. planemaker said Bombardier failed to cooperate in a U.S. investigation providing pricing information to the United States.

"A single large order, like Bombardier's sale to Delta, takes years of demand out of the market".

It includes a 79.82% tariff to offset a Commerce Department ruling that Bombardier engaged in price dumping, meaning it sold the CS100s to Delta below its fair market value by that amount.

No planes have yet entered the United States.

Boeing says the CSeries benefited from hundreds of millions of dollars in launch aid from the governments of Canada and Britain and a $1 billion equity infusion from the province of Quebec.

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