US slaps more anti-dumping duties on Bombardier CSeries

 

The US Commerce Department on Friday slapped more duties on imports of Canadian manufacturer Bombardier (Toronto: BBD-A.TO - news) 's new CSeries jetliners.

One week after announcing a 220 percent countervailing duty on the aircraft, the United States added another "preliminary" anti-dumping duty of 80 percent.

The moves stem from a complaint by US aerospace giant Boeing (NYSE: BA - news) alleging Bombardier had unfairly benefited from state subsidies that allowed it to sell 75 CSeries aircraft at below cost to Delta Airlines.

"The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship," said Commerce Secretary Wilbur Ross.

"We will continue to verify the accuracy of this decision, while do everything in our power to stand up for American companies and their workers."

According to Boeing's complaint, Bombardier sold its CS100 for $19.6 million each, or $13.6 million below cost.

It also said Bombardier received more than US$3 billion in subsidies from Ottawa and the Quebec government.

A final decision is expected on December 19. If confirmed, the levies would be applied to the CSeries when they are delivered to Delta starting in spring 2018.

The jetliner is the first new design in the 100- to 150-seat category in more than 25 years, and only just started to roll off assembly lines.

Ottawa and Bombardier reacted angrily to the duties, accusing Boeing of manipulating the US trade remedy system to try to prevent a new competitor from selling in the key US aviation market.

"We are extremely disappointed by and in complete disagreement with the US Department of Commerce's preliminary determination in the anti-dumping investigation of exports of large aircraft from Canada," Foreign Minister Chrystia Freeland said.

She (Munich: SOQ.MU - news) also called the duties "baseless and absurdly high" while Bombardier called the Commerce decision an "egregious overreach."

Bombardier spokeswoman Nathalie Siphengphet noted that all aerospace manufacturers, including Boeing, discount new models, adding that the US company's "hypocrisy is appalling."

By looking only at the first year of the CSeries rollout, she said Commerce's probe would result in a "deeply distorted finding."

In addition to creating jobs in Canada and Britain, Siphengphet pointed out that the CSeries going forward would generate more than US$30 billion for US suppliers and support 22,700 American jobs.

Relations between Ottawa and Washington have been strained for months over the renegotiation of the North American Free Trade Agreement (NAFTA), and another trade row over softwood lumber.

Canadian Prime Minister Justin Trudeau is scheduled to meet with US President Donald Trump on Wednesday to discuss these trade irritants as a fourth round of NAFTA talks kick off in a Washington suburb.

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