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US slaps new import duty on Canada's Bombardier

October 7, 2017

The US Commerce Department has hit Canadian plane maker Bombardier's new CSeries jetliners with another import duty. The move comes a week after a 220 percent duty was placed on the key rival to the US firm Boeing.

A Bombardier CSeries aircraft
A Bombardier CSeries aircraftImage: picture-alliance/dpa/Bombardier

The 80-percent duty would apply to medium-range aircraft with 100 to 150 seats, the Commerce Department said on Friday. The duties would be applied to Bombardier's CSeries when delivered to Delta Airlines from the spring of 2018.

A final decision is expected from the Commerce Department on December 19. If accepted, the duties would then have to be confirmed by the US International Trade Commission and, if not upheld, the cash deposits to that date collected would be reimbursed.

Boeing's accusations

US aerospace giant Boeing has alleged that Bombardier unfairly benefited from state subsidies allowing it to sell 75 CSeries aircraft at below cost to Delta Airlines.

Boeing said Bombardier was selling its CS100 for $19.6 million (€17 million) each, that is $13.6 million below cost. It added that Bombardier had received over $3 billion in subsidies from the Canadian government in Ottawa and the Quebec provincial government combined.

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

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

Canada reacts

Ottawa and Bombardier have in turn accused Boeing of manipulating the US Trade Remedy System to try to stop a rival from selling on the 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, adding that the duties were "baseless and absurdly high."

Bombardier called the decision an "egregious overreach."

Bombardier can appeal the decision to a US court or to a dispute-resolution panel created under the North American Free Trade Agreement (NAFTA). The Canadian government can also take the case to the World Trade Organization (WTO) in Geneva.

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

Siphengphet added that the CSeries would generate $30 billion for US suppliers and support 22,700 US jobs.

Ottawa-Washington have had strained relations in recent months mainly over NAFTA renegotiations.

Canadian Prime Minister Justin Trudeau is scheduled to meet with US President Donald Trump on Wednesday.

Planemaker feud reaches new heights

jbh/jm (AFP, dpa, AP)