U.S. isn’t backing down on Canadian plane maker

In October, Commerce issued preliminary findings that called for levying a pair of tariffs totaling nearly 300% on imports of single-aisle Bombardier C Series airliners.

Boeing, the American aerospace giant, claims it was harmed by the new Bombardier plane, alleging Bombardier unfairly benefited from bailout subsidies from the Canadian federal and provincial governments. Boeing claims those funds allowed Bombardier to sell its new C Series airliner to Delta Air Lines at “absurdly low prices” in violation of U.S. trade rules.

Delta in 2016 ordered up to 125 110-seat C Series jets for its fleet. Deliveries were expected to begin in spring 2018, but those plans are in question pending the outcome of the case.

The ongoing case has already disrupted deals between Boeing and Canada.

The Canadian government last week decided to purchase used F/A-18 Hornet fighters from Australia rather than buy 18 new Boeing Super Hornets. Canadian Prime Minister Justin Trudeau had threatened to nix the proposed $5.23 billion deal with Boeing as long as the trade case continued.

The spat has pushed Bombardier and Boeing’s European rival Airbus close together. The pair agreed in October to form a partnership giving Airbus a 50.01% stake in the jetliner program and announced plans to build C Series jets on a second assembly line in Mobile, Alabama.

Bombardier and Airbus claim jets assembled in the U.S. would not be subject to any tariffs, but Boeing disagrees saying the tariffs would should similarly apply to “partially assembled” planes manufactured in U.S. factories. Delta’s Chief Executive said the airline has no intention of paying the 300% tariff on its new jetliners.

The tariffs would increase the price of each jet for Delta or any U.S. airline by almost four times, effectively rendering them not economically viable.

U.K. officials have warned that the tariffs could threaten 4,100 jobs at plants in Northern Ireland making parts for Bombardier.

The Commerce Department pointed out Wednesday that Bombardier, the Canadian Government and Boeing “agreed that the proposed transaction between Bombardier and Airbus does not impact these investigations.” That deal isn’t expected to be finalized until the second half of 2018.

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