CSeries Dispute
- Jonathan
- Oct 6, 2017
- 3 min read
(Credits to Bombardier)
What happened?
Many of you heard about the big dispute going on between Bombardier and Boeing. Boeing accused the Canadian company of receiving unfair government subsidies They filed a case of dumping in the US International Trade Commission (USITC) and the Department of Commerce. For those who don't know, dumping is when a company exports a product at a price lower in the foreign market than the priced charged in the domestic market. Boeing claims that Bombardier's new aircraft have an unfair advantage over its own similar aircraft in the US market.
While subsidies are common ,in which Boeing has also received plenty of them from the government, Boeing claims the specific kinds of subsidies that Bombardier receives are unfair.
The US based aero company claims that Delta bough each jet for 19,6 million dollars despite a list price of $80 million (Delta said Boeing's claim is inaccurate)
What's going to happen?
The USITC has ruled that there was a case to hear and there was going to be a trial in February. The US Commerce Department anti-dumping has started in investigation, if Bombardier is found of dumping, their could be a serious penalties for the Quebec based company. For now an interim tariff of 219,63% has been recommended against Bombardier. Bombardier would not have to pay for the duties till the first Cseries 100 is delivered to Delta in the springs. Meanwhile, Prime Minister of Canada and UK are urging Trump to take action if not future relations with US could be at risk.
Who's on Bombardier side?
Canadian Prime Minister and United Kingdom Prime Minister, Theresa May, are asking Trump to handle the situation if not all future relationships with the US and Boeing could be at stake. They've also asked personally Boeing to drop its case against Bombardier. Justin Trudeau and Theresa May are discussing what to do with Boeing and future relations with the United States. Canada's foreign affairs minister, said in a statement:
“The aerospace industries of Canada and the United States are highly integrated and support well-paying, middle-class jobs on both sides of the border.
“The U.S. Department of Commerce’s preliminary determinations almost always rule in favour of the U.S. complainant.
“While this is only a preliminary stage in the investigation, and no duties can be imposed until the final investigations are completed, Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft. This is clearly aimed at eliminating Bombardier’s C Series aircraft from the U.S. market.
“Components of the Bombardier C Series are supplied by American companies, directly supporting almost 23,000 well-paying jobs in many U.S. states, including Connecticut, Florida, New Jersey, Washington, New York, Ohio, Kansas, Pennsylvania and Colorado. Boeing’s petition is threatening these U.S. jobs.
“Our government has repeatedly raised this issue with key members of the U.S. administration, with American elected officials and with Boeing. We will continue to raise this at the highest levels.
“We will always defend Canadian companies and Canadian workers against unfair and costly protectionism.”
Theresa May tweeted:
What's at stake?
- Many international jobs are at risk of being loosed. Bombardier is Northern Ireland's largest manufacturing employer. The case can endanger alone 4,500 employs in the British province.
- Nearly 23,000 Jobs in the US states of Connecticut, Florida, New Jersey, Washington, New York, Ohio, Kansas, Pennsylvania and Colorado are at risk as many components of the aircraft are manufactured in the United States of America.
- The North American Free Trade Agreement could be jeopardized according to Canada officials. In the meantime, Canada is working on a free trade with the UK as they might pull out from the treaty if the Trump administration doesn't do anything
- Canada talk to purchase 18 Super Hornet fighterjets could be cancelled as Justin trudeau tweeted "We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business"
- Canada and the UK could potentially sue the US government or/and Boeing at the World Trade Organisation
What's Bombardier response?
Bombardier tweeted the following:
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