Commerce Department sides with Boeing on CSeries tariff

Marcus Newton
December 22, 2017

In a win for Boeing (BA +0.2%), the U.S. Commerce Department finalizes duties of almost 300% on passenger jets made by Bombardier (OTCQX:BDRAF, OTCQX:BDRBF).

"The Commerce Department announced total duties of 292.21 percent - a final antidumping rate of 72.82 percent and a final countervailing duty rate of 212.39 percent - in a case brought by Chicago-based Boeing".

The decision follows the DoC's preliminary recommendation of duties on Bombardier's C Series jets earlier this fall. If no injury is found, the ITC could terminate the Commerce Department's tariff.

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

"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", he said.

The Bombardier CSeries jets are narrow-body commercial aircraft for medium-range routes, a category also served by Boeing with its 737 series and Airbus with the A320 series.

"Today's decision validates Boeing's complaints regarding Bombardier's pricing in the United States, pricing that has harmed our workforce and US industry", Boeing said in a statement.

Boeing, which launched the petition over the sale of 75 CSeries aircraft to Delta Air Lines, says the decision validates its complaint.

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Boeing claims Delta paid $20 million per plane, well below an estimated cost of $33 million and what Bombardier charges in Canada. "That's years of lost production and deliveries for Boeing, years of lost work for our employees, and years of lost work for our US suppliers", Boeing Executive Vice President Kevin McAllister said.

Bombardier doesn't deny that Delta received a good price.

No planes have yet entered the United States.

"Tariffs on the scale proposed by the US Commerce Department in the world's largest airline market, threaten to undermine the long-term economics of Bombardier's presence in Northern Ireland".

Boeing says the CSeries benefited from hundreds of millions of dollars in launch aid from the governments of Canada and Britain and a $1 billion equity infusion from the province of Quebec.

The U.S. planemaker said Bombardier failed to cooperate in a U.S. investigation providing pricing information to the United States.

Under a newly forged Bombardier-Airbus partnership a new manufacturing plant will be built in Alabama where the planes will be assembled, providing a possible avenue to avoid the hefty duty.

Other reports by MaliBehiribAe

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