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US government recommends 220% import tariff on CSeries

Boeing says the US Department of Commerce has recommended that a tariff of about 220% be slapped on imports of Bombardier CSeries aircraft.

The news, though not yet confirmed by the US government, would mark a victory by Boeing, which claims Bombardier's sale of 75 CS100s to Delta Air Lines in 2016 violated trade rules.

Boeing says the Commerce Department specifically recommends a 219.63% tariff on imports, though the decision is preliminary pending a final determination.

The dollar amount of the tariff remains uncertain, but Boeing has claimed that Bombardier sold the aircraft to Delta at a price of about $20 million each, which would equate to an import tariff of nearly $44 million per aircraft.

"Subsidies enabled Bombardier to dump its product into the US market, harming aerospace workers in the United States and throughout Boeing’s global supply chain. Early next month, Commerce is expected to confirm the magnitude of the illegal dumping and announce additional duties associated with that finding," says Boeing in a media release.

But Boeing's argument has drawn fierce opposition from political interests, including the prime ministers of Canada and the UK, and some customers, including the chief executives of JetBlue and Spirit.

Bombardier criticises the Commerce Department's preliminary ruling as "absurd and divorced from the reality about the financing of multibillion-dollar aircraft programmes".

"This result underscores what we have been saying for months: the US 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 CSeries," Bombardier says in a statement.

Boeing in April had submitted a petition claiming financial harm from Bombardier's 2016 sale of 75 CS100s to Delta.

Boeing alleged that a heavily-subsidised Bombardier sold the aircraft to Bombardier at a price of about $20 million. Those aircraft, Boeing estimated, cost more than $33 million to produce.

The US airframer also argued that Bombardier has benefited from $2.5 billion in government equity infusions, nearly $500 million in CSeries launch aid and at least $1.6 billion in other subsidies, according to its petition.

Boeing said the CS100 competes with the smallest versions of its 737 line, the 737-700 and 737 Max 7.

Bombardier did not immediately respond to a request for comment from FlightGlobal, but the company has denied Boeing's allegations.

It has said the roughly 100-seat CS100 did not cause financial harm to US industry because Boeing does not make an aircraft in that category. The roughly 130-seat 737-700 and 737 Max 7, Bombardier says, do not compete with the CS100.

The trade dispute has also threatened the relationship between the government of Canada and Boeing, with Canadian prime minister Justin Trudeau threatening to cancel Canada's order for F/A-18 fighter jets should Boeing continue its efforts against Bombardier.

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