Business

Canada's Bombardier wins big over Boeing in trade dispute

Posted January 26, 2018 1:31 p.m. EST

— Canadian plane maker Bombardier scored a huge win in its ongoing trade dispute with Boeing.

The U.S. International Trade Commission voted unanimously Friday that Boeing was not harmed by Bombardier and its all-new C Series jet.

The vote effectively shelves two tariffs, totaling nearly 300%, that the U.S. Commerce Department wanted to impose on Bombardier.

Boeing, the American aerospace giant, claims Canada's Bombardier unfairly benefited from government bailout subsidies. Boeing says those funds allowed Bombardier to sell its new C Series airliner to Delta Air Lines at "absurdly low prices" in violation of U.S. trade rules.

Delta in 2016 ordered up to 125 of the 110-seat C Series jets. Deliveries were expected to begin in spring 2018, but those plans are in question pending the outcome of the case.

While Boeing's claims of harm come as the Trump administration strikes an aggressive posture on trade, the ITC's appointees were all chosen by either Presidents Barack Obama or George W. Bush.

Boeing can appeal the case to either the Court of International Trade, part of the U.S. Federal Court System, or to a review panel organized under the NAFTA.

The trade case, which was filed in April, has reshaped the commercial aerospace landscape.

The dispute forced Bombardier into the arms of Boeing's chief rival Airbus. Bombardier and the European aerospace giant announced plans in October to give 50.01% control of the C Series program to Airbus as part of a strategic tie up.

As part of that deal, Airbus would open a new assembly line for the C Series jet in Mobile, Alabama, where it builds A320 family aircraft for its U.S. customers.

Bombardier and Airbus claim jets assembled in the U.S. would not be subject to any tariffs, but Boeing disagrees, saying the tariffs would should similarly apply to "partially assembled" planes manufactured in U.S. factories.

Delta's Chief Executive said the airline has no intention of paying the 300% tariff on its new jetliners.

Subsequently, Boeing and Brazil's Embraer confirmed they were in merger talks last month, part of a longstanding courtship between the pair that dates back decades.

The dispute has strained relations between Boeing and Canada. The Canadian government last month decided to purchase used F/A-18 Hornet fighters from Australia rather than buy 18 new Boeing Super Hornets. Canadian Prime Minister Justin Trudeau had threatened to nix the proposed $5.23 billion deal with Boeing as long as the trade case continued.