Risk & Compliance

U.S. Trade Panel Overturns Bombardier Tariffs

The International Trade Commission's ruling gives a surprise victory to Bombardier in a trade dispute with Boeing over its CSeries planes.
Matthew HellerJanuary 26, 2018

In an unexpected setback for the Trump administration’s “America First” trade policy, the U.S. International Trade Commission said Canadian aircraft manufacturer Bombardier could import its CSeries planes without huge tariffs.

The Commerce Department had imposed a nearly 300% tariff after finding in a case initiated by Boeing that Bombardier’s pricing of the 100- to 150-seat jets amounted to “dumping” of goods well below cost. The company has been able to keep the price down, the department said, because of unfair Canadian government subsidies.

But the ITC on Friday nullified that decision on a 4-0 vote, ruling that a U.S. industry would not be “materially injured or threatened with material injury” by imports of the Bombardier planes.

Boeing, which can appeal the ITC’s ruling through the U.S. court system, said it was disappointed the commission did not recognize “the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the U.S. small single-aisle airplane market.”

But Bombardier hailed the decision as “a victory for innovation, competition and the rule of law.” The company can now proceed with the delivery of 75 CSeries jets to Delta Air Lines, originally scheduled to begin in the spring.

As Reuters reports, U.S.-Canadian trade relations “have been complicated by disputes over tariffs on Canadian lumber and U.S. milk and President Donald Trump’s desire to renegotiate or even abandon the North American Free Trade Agreement.”

According to BBC News, most analysts had “thought the odds were stacked against Bombardier” after the Commerce Department ruled in Boeing’s favor. Boeing argued that Bombardier had offered the CSeries to Delta “at absurdly low prices,” forcing it to discount its 737 narrow-bodies to compete with the Canadian firm.

Under a new partnership with Bombardier, Airbus SE will take control of the CSeries program and assemble U.S.-bound jets at a facility in Alabama.

“Nothing is sweeter than a surprise, a surprise victory,” Airbus Chief Executive Tom Enders said, promising to push ahead “full throttle” with the Alabama plans.