US proposes additional 80% import duty on Bombardier C-Series jet

The U.S. Commerce Department has ruled in favour of US aerospace giant Boeing in its international trade dispute with Canadian rival Bombardier, proposing a further increase on the import duty on Bombardier’s C-Series jet by an additional 80% for alleged below-cost selling.

This follows a 220% tariff proposed last week on Bombardier C-Series planes imported to the United States.

Boeing has accused Bombardier of receiving state subsidies from the Canadian and British governments, allowing the Canadian rival to sell aircraft in the US for below cost price.

“This is a disappointing statement but hardly surprising given last week’s preliminary ruling sided with Boeing,” a British government spokesman said on Saturday.

“We continue to make all efforts alongside the Canadian government to get Boeing to the table to resolve the case.”

The Commerce Department has proposed a 79.82 percent antidumping duty, on top of a 219.63 percent duty for subsidies.

The proposed duties first need to be approved by the U.S. International Trade Commission (ITC) before going into effect.

bombardier cs100Bombardier said in a statement:

“We strongly disagree with the Commerce Department’s preliminary decision. It represents an egregious overreach and misapplication of the U.S. trade laws in an apparent attempt to block the C Series aircraft from entering the U.S. market, irrespective of the negative impacts to the U.S. aerospace industry, U.S. jobs, U.S. airlines, and the U.S. flying public.

“The Commerce Department’s approach throughout this investigation has completely ignored aerospace industry realities. Boeing’s own program cost accounting practices – selling aircraft below production costs for years after launching a program – would fail under Commerce’s approach. This hypocrisy is appalling, and it should be deeply troubling to any importer of large, complex, and highly engineered products.”

An “avoidable outcome within Bombardier’s control,” says Boeing

In a statement Boeing said: “Today’s decision follows a fact-based investigation by the Commerce Department and it validates Boeing’s dumping complaints regarding Bombardier’s pricing in the United States.

“This was an avoidable outcome within Bombardier’s control. The laws governing global trade are transparent and well known.”

US Secretary of Commerce Wilbur Ross commented on the issue: “The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship”.

“We will continue to verify the accuracy of this decision, while doing everything in our power to stand up for American companies and their workers.”

Video – What is International Trade

International trade refers to countries exporting and importing goods and services.