UK enters Bombardier-Boeing trade dispute

Posted on 27 Sep 2017 by Michael Cruickshank

The UK Government has entered into an ongoing trade dispute between Bombardier and Boeing over the manufacturing of new C-Series jets.

A Bombardier C-Series Jet. Image courtesy of Wikipedia - Alexandre Gouger
A Bombardier C-Series Jet. Image courtesy of Wikipedia – Alexandre Gouger.

The C-Series is a medium range narrow body aircraft built by Canadian aerospace and train manufacturer Bombardier.

Earlier this week, the US International Trade Commission slapped these aircraft with a 219% tariff for each plane that is imported into the United States.

These tariffs were brought about due to action by rival US aerospace company Boeing, which alleged that the C-Series jets were uncompetitively cheap to due generous subsidies given to Bombardier by the Canadian Government.

This move would triple the cost of the jets, and likely jeopardize a large a $5.6bn (£4.15bn) deal with Delta for the purchase of up to 125 of the jets.

As these jets are partially manufactured at a purpose-built facility in Northern Ireland which employs more than 1000 workers, the UK government responded with harsh rhetoric to the US decision.

“Bitterly disappointed by initial Bombardier ruling. The Government will continue to work with the company to protect vital jobs for Northern Ireland,” UK Prime Minister Theresa May tweeted.

Reportedly, Prime Minister May had personally lobbied US President Trump to support Bombardier in its dispute with Boeing.

Despite this, the US Department of Commerce ruled that Bombardier had received unfair, anti-competitive support and subsidies from the Quebec regional government, a ruling in line with Trump’s ‘America First’ trade protectionist platform.

UK and Canadian relations with Boeing soured

The US decision could potentially create long-lasting damage for Boeing in the Canadian and UK markets, both large buyers of the kinds of defense and aerospace systems manufactured by the company.

Canada’s Prime Minister Trudeau this week remarked that his country “would not do business” with Boeing if the tariffs continue.

Meanwhile, UK Secretary of Defense, Sir Michael Fallon, was reported by the BBC to have said that “Boeing stands to gain from British defense spending” however “this kind of behavior could jeopardize our future relationship” with the company.

Both sides nonetheless still have room to move, with the final ruling on the tariffs not due to be completed until 2018.