Bombardier hit with 220% U.S. import tariff

 The U.S. Department of Commerce in an initial ruling has imposed “countervailing duties” of 220% on imports of Bombardier Canada’s C Series aircraft.

The decision is subject to final consideration by the Department of Commerce and the US International Trade Commission.

If the ruling is confirmed, and CSeries imports are found to “threaten material injury” to the US aircraft industry, a final countervailing duty order will be issued on 8 February next year.

The decision had significant implications for jobs in Bombardier’s Northern Ireland facility. Bombardier’s plant in Belfast produces a range of aerostructures but, crucially, builds the wings for both variants of the C Series, the CS100 and CS300.

Prime minister Theresa May’s office states that it is “bitterly disappointed” by the initial ruling by the US Department of Commerce.

“The government will continue to work with the company to protect vital jobs for Northern Ireland,” says the prime minister’s office.

Boeing was the instigator the US government’s investigation into the C Series, which competes in the 100- to 150-seat sector complaining that Bombardier got unfair state subsidies from the UK and Canada, helping it win a major order.

Delta Air Lines’ order for 75 CSeries jets last year triggered the Boeing complaint and the subsequent investigation.

The Department of Commerce says it will “instruct” US customs authorities to collect cash deposits from importers of aircraft in this range based on the subsidy rate calculated – effectively trebling the price of the CSeries to US customers.

Bombardier said it would fight the “absurd” ruling.

The UK government and trade unions fear the imposition of tariffs could make the Canadian firm question whether to remain in Northern Ireland, where it employs 4,100 of its 28,000-strong workforce.

The ruling damaged the global aerospace industry and was “frankly not what we would expect of a long-term partner to the UK”, said a UK government spokesman, while emphasising this was just the first step in a lengthy process.

About 1,000 jobs are linked to the C-Series, the wings of which are made at a purpose-built £520m factory at Queen’s Island in Belfast.

The programme is not just important to Bombardier jobs in Belfast, but also to 15 smaller aerospace firms in NI – and dozens more across the UK – which make components for the wings.

In the the latest development, U.K. Defence Secretary Sir Michael Fallon has said that Boeing could be dropped from new contracts with the Government. He said: “Boeing is a major defence partner and one of the big winners of the latest defence review so this is not the kind of behaviour we expect from a long-term partner”

He added: “Boeing stand to gain a lot of British defence spending. We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters and they will also be bidding for other defence work and this kind of behaviour clearly could jeopardise our future relationship with Boeing.”

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Martin Cunliffe
Martin is a travel and transport enthusiast (including horseback). His specialist areas are the U.K. & Far East but his travels are taking him to South America next with a visit to Peru.

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