The US International Trade Commission (ITC) has unanimously struck down tariffs imposed by the US Department of Commerce against Bombardier's CSeries, handing a major victory to the Montreal-based manufacturer and clearing the way for duty-free imports of CSeries aircraft.

The vote in favour of Bombardier by the ITC's four commissioners injects fresh life into Bombardier and its signature CSeries – an aircraft that in recent months faced an uncertain future thanks to a looming threat of a 292% import tariff.

The commission voted that Boeing suffered no harm from Bombardier's sale of CSeries.

The ITC has not yet disclosed the rationale behind the commissioners' votes; those details should be available by 9 February when the ITC sends a report to the Commerce Department.

"Today’s decision is a victory for innovation, competition, and the rule of law. It is also a victory for US airlines and the US traveling public," says Bombardier in a statement. "The CSeries is the most innovative and efficient new aircraft in a generation. Its development and production represent thousands of jobs in the United States, Canada, and the United Kingdom."

"With this matter behind us, we are moving full speed ahead with finalising our partnership with Airbus. Integration planning is going well and we look forward to delivering the CSeries to the US market so that US airlines and the US flying public can enjoy the many benefits of this remarkable aircraft," Bombardier adds.

“We are disappointed that the International Trade Commission did not recognise the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the US," says Boeing in a statement. "Those violations have harmed the US aerospace industry, and we are feeling the effects of those unfair business practices in the market every day."

“While we disagree with the ITC’s conclusion today, we will review the commission’s more detailed opinions in full as they are released in the coming days," Boeing adds. “Boeing remains confident in the facts of our case and will continue to document any harm to Boeing and our extensive US supply chain that results from illegal subsidies and dumped pricing."

Boeing can appeal the ITC's vote to the US Court of International Trade in New York City; it can further appeal that decision to federal circuit, says an ITC spokesperson.

Many industry observers had expected the trade panel to rule against Bombardier. The ITC already determined that good reason existed to continue the investigation, and the Department of Commerce sided with Boeing last year, slapping 292% countervailing and anti-dumping import duties on CSeries.

But those duties would only take effect if the ITC found Boeing suffered harm, which it did not.

The vote caps an eight-month dispute that has encompassed not only Boeing and Bombardier, but also Airbus, Embraer and the governments of Canada and the UK.

The dispute kicked off in April 2017 when Boeing filed a trade petition with US officials, claiming a heavily-subsidised Bombardier dumped 75 CS100s at below-market rates in a sale to Delta in 2016. Deliveries were to begin in 2018.

"Delta is pleased by the ITC’s ruling rejecting Boeing’s anticompetitive attempt to deny US airlines and the US traveling public access to the state-of-the-art 110-seat CS100 aircraft when Boeing offers no viable alternative," Delta says in a statement.

Boeing's petition had said Bombardier was propped up by nearly $4.5 billion in government equity infusions, launch aid and other subsidies. It said Bombardier sold aircraft that cost $33.2 million each to produce to Delta for $19.6 million each, violating US trade laws.

That sale, and an allegedly lowball offer to United Airlines, harmed sales and sale prices of Boeing's competing 737-700 and 737 Max 7, Boeing said.

Bombardier has long denied the claims, insisting Boeing's price estimates are incorrect and saying all aircraft manufacturers offer discounted "launch" pricing to customers to account for risks taken when acquiring new aircraft types.

Bombardier's defense also rested heavily on the claim that its technologically-advanced CSeries, with about 110-seats, does not even compete with the 737-700 or 737 Max 7, which carry between 126 and 138 seats.

Bombardier has said it competes more closely with Embraer E-Jets.

The company had strong backing from the Canadian government and the government of the UK, home to a manufacturing site in Northern Ireland where Bombardier makes CSeries wings.

The dispute even led Canada to cancel an order for Boeing F/A-18 fighter jets, and the Canadian government earlier this month complained about US import tax practices with the World Trade Organisation.

Delta also backed Bombardier, saying Boeing offered no competitive product other than used E190s.


Boeing's April petition set in motion two concurrent investigations: one by the Commerce Department and one by the ITC.

The Commerce Department's job was to determine if Bombardier was unfairly subsidised and if it dumped aircraft in the USA, and to then assess import duties.

Commerce already came back positive on both counts, and last year slapped CSeries imports with 292% import duties.

Those duties, however, were dependent on an affirmative determination by the ITC, which was tasked with determining if US industry – namely Boeing – will suffer harm from CSeries imports.

Last October, as the investigatory processes slogged onward, Bombardier announced a potential workaround: a plan to transfer majority CSeries ownership to Airbus and to open a CSeries final assembly site in Alabama.

Though the deal would delay CS100 deliveries to Delta, Bombardier and Airbus said their agreement, still to be finalised in the second half of 2018, would free the CSeries from the threat of import duties.

Airbus described the deal as a means to become more competitive in the 100- to 150-seat aircraft segment. The company's chief executive Tom Enders implied Airbus intends to stop production of A319s once it acquires CSeries.

In December 2017, the CSeries dispute took a new turn when Boeing and Embraer announced that they were studying a potential combination, which would likely involve Embraer's E-Jet programme. Embraer, which is also lobbying for action at the World Trade Organization against what it alleges to be unfair state subsidies for the CSeries, had welcomed the US Commerce Department's recommendations for tariffs on CSeries imports.

Bombardier and some industry observers view the Embraer-Boeing talks as a sign that Boeing feels threatened by an Airbus-controlled CSeries and sees E-Jets as more competitive in the 100- to 150-seat aircraft market – a position Bombardier has argued all along.

But Boeing insists it has long had interest in commercial ties with Embraer, and Boeing chief executive Dennis Muilenburg recently told The Seattle Times that the Airbus-Bombardier deal did "not at all" trigger Boeing's recent talks with the Brazilian manufacturer.

Boeing also disputes the notion that CSeries assembled in the USA will be free of import taxes, insisting components imported to produce US-assembled CSeries would be subject to the tax.

Additional reporting by Stephen Trimble

Source: Cirium Dashboard