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U.S. Commerce Slaps Bombardier with More Tariffs

The U.S. Commerce Department has hit Bombardier with a second tariff on its CSeries commercial jet.

The department said Friday it will impose a 79.82 per cent preliminary anti-dumping duty, bringing the total duties imposed against the Montreal-based company’s 100- to 150-seat civilian aircraft to roughly 300 per cent.

Although the tariffs are not finalized yet.

The real test will come next year when Boeing will have to prove before the International Trade Commission (ITC) that it suffered injury at the hands of the C Series. Legal experts have said it will be difficult for Boeing to make that case given it does not make a plane comparable to the C Series.

However, U.S. law remains stacked in favour of those making the complaint. For example, in the event ITC commissioners are split on a decision, the ruling is awarded to the complainant. And Boeing has risen to significant influence inside the Trump White House, according to CNN.

“Whatever the outcome, Bombardier, the Canadian government and the government of Quebec are likely to appeal any negative rulings to the highest levels of international trade,” said Dan Fong, an analyst with Veritas Investment Research. “In the meantime, C Series sales momentum in the U.S. will be significantly curtailed, which may also put pricing pressure on Bombardier’s international sales efforts.”

International Response

The continued fight with Bombardier will also likely hurt American relations outside of North America as nations such as Britain also greatly rely on Bombardier to service their aerospace needs.

Displaying the need for Bombardier to remain competitive UK prime minister, Theresa May, lobbied the US president, Donald Trump, last month over the dispute sparked by Boeing’s complaints about “unfair” state subsidies from the UK and Canada.

As the United States continues to increase tariffs both the UK and Canada have threatened retaliation through a reduction in purchases of Boeing military equipment.

 

 

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