It seems the battle between Boeing and Bombardier over the subsides on the CSeries has taken a turn for the ugly – with the US Department of Commence proposing to charge a tariff of 219.63% per CSeries sale to an US Carrier – in effect trebling the price of acquiring a CSeries aircraft.
Bombardier CSeries landing in the sunset – Image, Bombardier
The root of the complaint appears to be that Bombardier has got unfair subsidies from Canada and the United Kingdom – and helping it win an order in the process.
The comments coming out of Bombardier hasn’t been… well… held back. In their press release, Bombardier states:
“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 U.S. airlines and their passengers from benefiting from the C Series.
The simple truth is that Bombardier created a superior aircraft that is more efficient, more comfortable, and quieter. The C Series serves a market segment not supported by any U.S. manufacturer. Delta wants to bring this remarkable new aircraft to the U.S. flying public. Boeing wants to prevent U.S. passengers from realizing these benefits, irrespective of the harm that it would cause to the U.S. aerospace industry and the cost to airlines and consumers.
Looking beyond today’s and next month’s preliminary decisions, the International Trade Commission will determine next year whether Boeing suffered any injury from the C Series. Because Boeing did not compete at Delta and because Boeing years ago abandoned the market the C Series serves, there is no harm.
There is wide consensus within the industry on this point, as well as a growing chorus of voices, including airlines, consumer groups, trade experts, and many others who have come forward to express grave concerns with Boeing’s attempt to force U.S. airlines to buy less efficient planes with configurations they do not want and economics that do not deliver value.
The U.S. government should reject Boeing’s attempt to unfairly tilt the playing field in its favor and to impose an indirect tax on the flying public through unjustified import tariffs.”
This is unwelcome news for the CSeries project – least of all, the planned sale of aircraft to Delta (who have up to 125 of the type on order), and for anyone else wanting to operate the CSeries in the country in the future.
There’s still plenty of time for cajoling, arguments and posturing by both sides before the meeting of the US International Trade Commission in February 2018 to set the actual tariff – if it follows through.
This has got plenty of legs to run sadly – as do many trade disputes.
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