The U.S. Department of Commerce has imposed a stiff 219.3% anti-subsidy duty on Bombardier’s sale of 75 CS-100 aircraft to Delta Air Lines after ruling that the Canadian plane maker received unfair support from the Government of Canada.
“The U.S. values its relationships with Canada, but even our closest allies must play by the rules,” Department of Commerce Secretary Wilbur Ross said in a statement. “The subsidization of goods by foreign governments is something that the Trump Administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination.”
Earlier this year, Boeing filed a complaint with the U.S. International Trade Commission over Bombardier’s alleged dumping of C-Series aircraft. Boeing contends that the Canadian government’s $1 billion bailout of the C-Series program (in exchange for a 49.5% stake) enabled Bombardier to sell the CS-100 to Delta at a steep discount. Boeing argues that it was unable to compete with Bombardier in the 100-150 seat segment. The CS-100 seats 108 passengers in a normal two class configuration while the Boeing 737, the closest aircraft in terms of capacity to the CS-100, seats 137 passengers in a normal two class configuration.
“We strongly disagree with the Commerce Department’s preliminary decision. The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs. This result underscores what we have been saying for months: the U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition and prevent U.S. airlines and their passengers from benefiting from the C Series,” Bombardier said in a statement.
The DOC’s preliminary ruling will only take effect if the U.S. International Trade Commission (ITC) rules that Boeing was materially injured by Bombardier’s sale of C-Series aircraft. The ITC ruling should be finalized sometime next year.
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