US Bombardier tariff threatens United Kingdom aerospace jobs

US Bombardier tariff threatens United Kingdom aerospace jobs

US Bombardier tariff threatens United Kingdom aerospace jobs

The controversial tax ruling is the result of a long-running dispute between Bombardier and Boeing, which has claimed that unfair state subsidies from the United Kingdom and Canada had helped Bombardier win a major deal to supply up to 125 of the jets to U.S. airline Delta.

The decision from the US Commerce Department will raise tensions for the US with both the United Kingdom and Canadian governments.

A finding on whether Bombardier "dumped" CS100s into the U.S.by selling them below cost is due October 4.

"They need to emphasise to Boeing that they need to settle this without putting thousands of jobs at risk".

A source familiar with the Canadian government's thinking said the Boeing trade dispute was "separate" from the Nafta talks.

Boeing contends that Bombardier broke USA and global trade laws by selling its planes at "absurdly low prices", which makes for an unfair playing field and poses a risk to its long-term business.

"We are confident the USITC will conclude that no USA manufacturer is at risk because neither Boeing nor any other USA manufacturer makes any 100-110 seat aircraft that competes with the CS100".

The steep tariff, which is far in excess of the 160% Boeing had requested, amounts to making Delta pay the roughly $5.6 billion list price for the 75 jets it has on firm order.

"And they will have a very hard time in proving that Bombardier is causing material harm to that business in the United States".

"This is just a preliminary decision, so this will be a risk overhang on the program for some time", said Chris Higgins, an analyst at Morningstar. Asian markets ended the day mixed.

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The high profile dispute is also happening against the backdrop of ongoing NAFTA renegotiations, as officials from Mexico, Canada and the USA are now trying to hammer out a new free trade agreement in discussions that have reportedly been very hostile at times.

However, for now all eyes will be on the US International Trade Commission (USITC), which will make its own decision on the matter in early 2018. The department is scheduled to issue a final ruling in the case on December 12. "To damage this will be to damage the USA economy".

Bombardier Inc. is facing one of its biggest crises in years after a punitive ruling from the US threatened to make the Canadian manufacturer's key CSeries jet all but unsellable and its train operations were left isolated by a deal between European rivals.

"Subsidies enabled Bombardier to dump its product into the USA market, harming aerospace workers in the United States and throughout Boeing's global supply chain", it claimed.

The deal is more bad news for Bombardier, which is also in the train business.

The case has major implications for Bombardier as it could not only endanger its deal with Delta, but also hinder future sales in the USA and hurt those Canadian aerospace companies that work with Bombardier.

Delta, whose 75-jet order for the CSeries triggered the case, said it was confident the USA would take no action against it.

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It is one of the country's largest employers, with around 4,500 on the books.

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