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Canada's move as U.S. confirms hefty Bombardier trade duties

22 December 2017

"Boeing is using its meritless complaint as cover to close the USA market, which is one of the biggest in the world, to new entrants such as Bombardier's C Series aircraft", Turner said.

"This decision is based on a full and unbiased review of the facts in an open and transparent process", Commerce Secretary Wilbur Ross said in a statement.

In response to the complaints, the U.S. Department of Commerce levied duties of close to 300% on Bombardier's aircrafts.

The ruling affirms a preliminary finding that Bombardier received unfair subsidies from the Canadian government that allowed it to sell planes at below the cost of production, and compete unfairly with American aerospace giant Boeing (NYSE: BA - news), which lodged the complaint.

The agency's final tariff value dropped by roughly eight percentage points from a preliminary estimate released in September, but still counts as a massive victory for Boeing and a devastating blow to the commercial aircraft manufacturing industries of Quebec and Northern Ireland.

No planes have yet entered the United States.

That has been true since the start of the investigation, and recent developments make it even clearer, particularly the Bombardier and Airbus partnership, which will include the construction of a new USA manufacturing facility in Alabama.

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Boeing called for action from U.S. authorities saying the C-Series competes with its small 737 jet, a point refuted by Bombardier.

The Commerce Department's decision comes as the Trump Administration takes a hard line on trade practices it views as hurting American workers.

The decision is not necessarily final; it could be overturned if the U.S. International Trade Commission finds that Boeing did not suffer material injury as a result of the Delta sale; the ITC's final decision is expected on february 1. The trade dispute stems from a complaint by US aerospace giant Boeing against its Canadian rival that found a receptive ear in President Donald Trump, whose "America First" agenda has included taking a tough line in matters of worldwide commerce.

"Unfortunately, the Commerce Department decision is divorced from this reality and ignores long-standing business practices in the aerospace industry, including launch pricing and the financing of multi-billion dollar aircraft programs", said Mike Nadolski, Bombardier's vice president of communications and public affairs.

Bombardier was able to underprice the jets due to $3 billion in unfair government subsidies, Boeing says. Bombardier calls Boeing's criticism unfounded, saying that the US company's entire case has been overtaken by events.

The move affects 100- to 150-seat large civil aircraft from Canada.

The union represents 4,700 workers at Bombardier in the Montreal area.

Canada's move as U.S. confirms hefty Bombardier trade duties