Canada warns it may cancel United States jet buy over Bombardier probe
The U.S. Commerce Department on Thursday said it planned to launch new antidumping and countervailing duty investigations into Bombardier’s sale of 75 CS100 narrowbodies to Delta Air Lines.
A US aeronautics powerhouse is at a hearing arguing for duties on Bombardier aircraft.
Freeland says Boeing’s petition is “clearly aimed at blocking Bombardier’s new aircraft, the CSeries aircraft, from entering the USA market”.
The new Canadian aircraft competes with Boeing’s 737-700 and 737 MAX 7 jets.
The Canadian government said late last year it would enter into discussions with the USA and Boeing on buying 18 Super Hornet jet fighters from Boeing on an interim basis and hold an open competition to buy more planes over the next five years.
President Donald Trump has called for a strong stronger stance on trade with his “America First” policy that got a boost on Thursday when Commerce formally announced its intent to renegotiate the North American Free Trade Agreement. If the United States finds that Canadian subsidies for Bombardier have harmed Boeing and imposes duties, demand for the CSeries in the United States could suffer and airlines could pay more.
Bombardier representatives countered that their planes never competed with Boeing in a sale to Delta – which the American rival describes as a seminal moment. If the trade body allows the probe to continue, the Commerce Department would then need to determine any preliminary anti-subsidy duties by around July 22, with a deadline for preliminary anti-dumping duties around October 3. If the commission determines that the Bombardier sale to Delta unfairly damages USA industry the Commerce Department will continue its investigations and render a preliminary countervailing duty determination in July, followed by a preliminary antidumping determination in October, absent any deadline extensions.
The announcement marks a win by Boeing over rival Lockheed Martin. Sales discounts from list prices are typically 40 percent to 50 percent in the industry.
The Canadian aircraft subject to the investigations have not yet been imported, but the Commerce Department cited an April 2016 statement announcing the pending sale of Bombardier aircraft to Delta Air Lines in an order valued at Dollars 5.6 billion.
“Boeing admits it does not compete with exports of the CS100 aircraft, so it is all the more hard to see these allegations as legitimate, particularly with the dominance of the Boeing 737 family in the USA market”, according to Freeland’s statement.
“If the Commerce Department preliminarily determines that dumping or subsidisation is occurring, then it will instruct US Customs and Border Protection to start collecting cash deposits from all US companies importing the subject civil aircraft from Canada”, says the release.
Boeing is calling for countervailing duties of 79.41 per cent and anti-dumping charges of 79.82 per cent.