US imposes stiff tariffs on Canada's Bombardier
© AFP/File / by Jean-Louis Doublet, with Marc Braibant in Montreal | The US Commerce Department found that Bombardier had unfairly benefited from state subsidies in selling its 100- to 150-seat CSeries aircraft below cost to Delta Airlines
The United States announced Tuesday it was imposing preliminary anti-dumping duties of 220 percent on CSeries jets made by Canadian aerospace firm Bombardier following a complaint by American manufacturer Boeing.
The Commerce Department ruled that Bombardier had unfairly benefited from state subsidies in selling its 100- to 150-seat aircraft below cost to Delta Airlines.
Both Canada and the United Kingdom, where some of the parts are built, had sought to persuade the US to drop the case.
"The US values its relationships with Canada, but even our closest allies must play by the rules," said Commerce Secretary Wilbur Ross in explaining the move.
"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."
The ruling, which is set for a final determination on December 12, could further test relations between Ottawa and Washington, already strained by the ongoing renegotiation of the North Atlantic Free Trade Agreement (NAFTA) which also involves Mexico.
Canadian Foreign Minister Chrystia Freeland stressed that the US investigation was only in its preliminary stages and duties can only be imposed once the final probe is completed.
"Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft. This is clearly aimed at eliminating Bombardier's CSeries aircraft from the US market," she said.
"We will always defend Canadian companies and Canadian workers against unfair and costly protectionism."
Freeland stressed that components of the jets are supplied by American companies, directly supporting nearly 23,000 jobs across the United States.
"Boeing's petition is threatening these US jobs," she added.
- 'Absurd' -
Canadian Prime Minister Justin Trudeau threatened last week to call off a $5.2 billion purchase of 18 Boeing Super Hornet jet fighters from the US unless the case was dropped.
Bombardier also employees 8,000 people in Northern Ireland, including 4,200 in aeronautics, most in a Belfast factory that builds the CSeries wings and fuselage.
"We strongly disagree with the Commerce Department's preliminary decision," the company said.
"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 US trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition," it added.
Boeing had claimed Bombardier sold American Delta Airlines 75 CS100 aircraft for $19.6 million, despite manufacturing costs of $33.2 million.
The levies imposed by Washington would bring the theoretical cost of each plane to more than $60 million.
The US move comes as America, Canadian and Mexican negotiators are in contentious talks to renegotiate the North American Free Trade Agreement.