Bombardier Hit With More Tariffs
After punishing Bombardier with a 219 percent tariff on the CSeries airliner last week, the U.S. Commerce Department slapped another 80 percent levy on the jet this week. Responding to a complaint from Boeing, the Commerce department found that Bombardier’s prices on the CSeries in a sale to Delta Air Lines amounted to dumping or selling goods below cost.
According to the Seattle Times, the Commerce department said Bombardier failed to provide the information it requested in the case and it accepted Boeing’s argument that the CSeries sale represents unfair competition because of government subsidies. The tariff effectively quadruples the price of the CSeries jets for U.S. buyers. The Commerce ruling still has to be reviewed by the U.S. International Trade Commission, but if it’s approved, Delta’s purchase is unlikely to go through.
Bombardier can appeal the decision to the U.S. Court of International Trade or the World Trade Organization but that action is expected to take months. Although Boeing has no competitor for the CS100 Bombardier intended to sell to Delta, it noted that the sales contract allowed the airline to convert some of the 75-airplane order to the larger CS300. That could represent lost sales for Boeing.
If the tariff decision stands, U.S. companies won’t escape the impact. Half of the CSeries components are U.S. sourced, including the Pratt & Whitney geared turbofans that account for the airplane’s exceptional efficiency. The wings are manufactured in Ireland. Following Friday’s decision, Bombardier said the ruling “represents an egregious overreach and misapplication of U.S. trade laws in an apparent attempt to block CSeries aircraft from entering the U.S. market.”