With the United States International Trade Commission due to give a definitive ruling on a case originally brought by Boeing on Bombardier’s seemingly unfair pricing policy, the Canadian government has turned to the World Trade Organization (WTO) for help.
Boeing’s complaint is that their company, and its 737 single-aisle jet, has been harmed by the sale of 75 Bombardier C Series jets to U.S. carrier Delta Air Lines (Delta) at what was described by Boeing as a ‘dumping’ price, in this case a figure believed to be below the cost of manufacture of the aircraft. The deal had a book price of US$5 billion.
In response to Boeing’s complaint, the U.S. Commerce department ruled in two separate cases that Bombardier’s jets should be subject to an import duty of approaching 300%. The U.S. Trade Commission will decide whether or not Boeing has been adversely affected by the deal, and whether the newly imposed tariffs will remain enforceable. In the meantime, Deliveries of the new jets to Delta are likely to be delayed.
Part of Bombardier’s defense lies in the fact that the Canadian plane and train manufacturer intends to pair up with Airbus so that the Delta jets could be manufactured in Alabama, and that the majority of the parts would be sourced in the U.S. Outsiders are questioning whether Boeing can prove any damage to the company’s business as it stopped production of any jet considered to be in the same class as the Bombardier C Series back in 2006.
The trade feud has already sparked a diplomatic row between the United States, Canada and the United Kingdom. Canada has threatened to pull out of a deal to buy Boeing F/A-18 Super Hornets, and the U.K. said further Royal Air Force purchases from Boeing might be placed in question if these tariffs are imposed. Bombardier employs over 4,000 people in Northern Ireland, where the C Series wings are manufactured.
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