By Steve Dellar  |  10-07-2017   News
Photo credit: Alexey Fedorov | Dreamstime

On 27 September, the US surprised the aviation industry worldwide by ordering that Canadian Bombardier planes would be charged with a 219% import duty if sold in the US (this after a complaint by rival US plane make Boeing). You can read that story here: https://www.thegoldwater.com/news/8780-200-Import-Duty-On-Bombardier-Spells-Disaster-for-Canadian-Aviation-Industry

Today, the Commerce Department by order of the Trump White House Administration upped those import duties for Bombardier to a full 300%.

In essence, the 219.63% import duty is to be heightened by a 79.82% antidumping duty (meaning that the total price for any Bombardier plane proposed for sale to a US airline would be 4 times the normal price).

This decision has two separate consequences.

First, it makes clear to the Canadian producer of airplanes that the US is very serious about protecting their own manufacturers in case of a complaint. By pricing Bombardier out of the US market, the US administration is not necessarily saying that Boeing is right, it is saying that if Boeing has a valid claim, they will protect their own manufacturer at any cost.

Secondly, it ups the ante with the UK for a possible trade war when considering that in between 27 September, when the first import duties were announced, and now, when the second duties are announced, the UK government has threatened to cancel orders for Boeing planes for their own Defence Ministry. The US administration knows that because of Brexit negotiations, the leverage it has over the UK at the moment in trade negotiations is much bigger than a threat to cancel a few orders.

The British government did react through a spokesman: “This is a disappointing statement but hardly surprising given last week’s preliminary ruling sided with Boeing. We continue to make all efforts alongside the Canadian government to get Boeing to the table to resolve the case.”

The Canadian government meanwhile said Boeing was clearly “manipulating the U.S. trade remedy system”.

Source:

http://www.reuters.com/article/us-boeing-bombardier-commerce/u-s-backs-300-percent-in-duties-on-bombardier-after-boeing-complaint-idUSKBN1CB29X

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