Take hard line against Boeing in Bombardier spat, Quebec premier urges feds

Horizon Air Q-400 Bombadier

The tariff follows the department's preliminary finding in favor of USA rival Boeing's complaint that the smaller company received unfair government subsidies.

"Although couched in terms of fair-trading practices by U.S. Commerce Secretary Wilbur Ross, these decisions could have serious negative consequences for both Bombardier and the North American economy".

Canadian officials participating in the NAFTA talks criticized the Commerce Department's decision, with Foreign Affairs Minister Chrystia Freeland saying Canada “strongly disagrees” with the USA probes into its aerospace industry.

But Foreign Affairs Minister Chrystia Freeland made no mention of retaliatory action in a statement released after the ruling, promising instead to continue raising the dispute with US officials at all levels.

Bombardier's hopes for breaking into the U.S. commercial aviation market took a massive blow on Tuesday, as the U.S. Department of Commerce proposed a hefty 219 per cent duty on its CSeries jets. "US trade laws were never meant to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition".

The Premier of Canada's Quebec province Philippe Couillard has blasted Boeing, accusing the company of unfairly trying to destroy Bombardier.

In addition to the parallel price-dumping and countervailing duty investigations in the United States by the Commerce Department and International Trade Commission, Canada faces a WTO dispute filed earlier this year by Brazil and Embraer over subsidies for Bombardier and the CSeries.

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.

"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", Boeing said Tuesday.

Analyst Dale Doreen said Boeing's challenge shows that manufacturer, and possibly others, are anxious about competition.

"Boeing has no American-made product to offer because it canceled production of its only aircraft in this size range - the 717 - more than 10 years ago", Delta said in a statement Tuesday.

But Boeing conceded no ground, accusing Bombardier of illegally dumping its products in the USA single-aisle airplane market out of desperation. British Prime Minister Theresa May has discussed the case with Trump.

"Obviously we're disappointed by the decision and I will continue to fight hard for good Canadian jobs", said Prime Minister Justin Trudeau, calling the United States tariff "protectionist and warrantless". A small duty might allow all sides to declare victory and let Bombardier and Delta negotiate a smooth delivery of the planes, but many analysts say a hefty import fee is more likely.

Bombardier's (TSX:BBD.B) shares lost more than seven per cent to close at $2.10 Wednesday on the Toronto Stock Exchange as investors weighed the prospect of a 220 per cent duty on USA sales of its flagship CSeries passenger jets and the European merger of two railway rivals. If it makes an affirmative determination on subsidization, and the US International Trade Commission does likewise, the Department will issue a countervailing duty order.

At the Bombardier plant in Belfast, workers were nervous about what impact the dispute could have on their livelihoods.

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