US imposes huge tariff on Bombardier aircraft

US imposes huge tariff on Bombardier aircraft

The United States secretary of commerce, Wilbur Ross, has announced a ruling against Bombardier in a dispute with Boeing.

The American plane manufacturer had complained Bombardier got unfair state subsidies from both the UK and Canada, helping it win a major order from Delta Air Lines.

In response, a preliminary interim tariff of 220 per cent will be levied on 100- to 150-seat civil aircraft entering the US from Canada.

The commerce department has instructed United States customs and border protection officials to collect cash deposits from importers based on the preliminary rate.

“The US values its relationships with Canada, but even our closest allies must play by the rules,” said secretary Ross.

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“The subsidisation of goods by foreign governments is something that the Trump administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination.”

Although the Bombardier aircraft subject to the investigation have yet to be imported, an April 2016 press release from Delta Air Lines announcing the sale valued the order to be in excess of $5 billion.

The ruling could potentially jeopardise the deal for up to 125 planes.

In a statement Bombardier said: “We strongly disagree with the commerce department’s preliminary decision.

“The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs.

“This result underscores what we have been saying for months: the U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition and prevent US airlines and their passengers from benefiting from the C Series.

“Delta wants to bring this remarkable new aircraft to the US flying public.

“Boeing wants to prevent U.S. passengers from realising these benefits, irrespective of the harm that it would cause to the US aerospace industry and the cost to airlines and consumers.”

In the UK, the government and trade unions fear the imposition of tariffs could make Bombardier question remaining in Northern Ireland, where it employs 4,100 people in four locations.

About 1,000 jobs are linked to the C-Series, the wings of which are made at a purpose-built £520 million factory at Queen’s Island, Belfast.