Trade War Threats

Bombardier’s C Series has had a tariff imposed on its import to the United States after a complaint by Boeing alleging Bombardier was selling them at below market cost. This has escalated into a major trade dispute involving the United States, Canada and the UK and has led to Canada putting a hold on a planned procurement of 18 Boeing F/A- 18 Super Hornet fighters. UK Secretary of State for Defence Sir Michael Fallon has warned Boeing the dispute “jeopardises our future relationship” with the firm.

The US Department of Commerce sustained the Boeing complaint in September and imposed an interim tariff of 220% on C Series airliners. Boeing filed the complaint after Delta Air Lines ordered 125 CS100s in April 2016. On October 6, the US Department of Commerce imposed an additional 80% tariff. A final decision on the tariff by the International Trade Commission is expected in February 2018

Boeing alleges the CS100s, with a list price of $80 million, were sold to Delta at a unit price of $19.6 million. Delta has claimed this is not an accurate figure and provided the Department of Commerce with information as to the confidential sum it paid. Boeing alleges governmental loans and other programmes in support of Bombardier facilities in Quebec and Northern Ireland amount to prohibited subsidies. While the C Series final assembly is in Canada, over half of the aircraft’s components are from the United States, most notably their Pratt & Whitney 1500G turbofan engines.

David C Isby