US Agency Announces Rejection of Bombardier Tariffs on Finding C-Series deal

By Yan Gouger [CC BY-SA 3.0] via Wikimedia Commons

On Wednesday, an independent trade body in the United States of America said that it rejected massive duties on the C-Series jets of Bombardier partly since Boeing lost no revenue or sales when Delta Air Lines ordered the aircraft from the Canadian planemaker in 2016.

The International Trade Commission (ITC) also said that the 110-seat C-Series jets that were ordered by Delta and the smallest 737 MAX 7 plane of Boeing Co do not compete. He added that the sale to Delta did not come at the expense of the American planemaker as it did not offer new aircraft to the No 2 carrier in the United States.

In its 194-page ruling, the ITC stated: “Boeing lost no sales or revenues.

“The higher standard seating capacity of the 737-700 and 737 MAX 7 limits competition between those models and the CS100 for some purchasers.”

The agency issued the said reasoning three weeks after its ruling on the 26th of January that discarded a recommendation of a US Commerce Department to slap an almost 300pc duty on sales of the 110-to-130-seat C-Series jets of Bombardier Inc for five years, after a complaint by Boeing.

ITC commissioners voted 4-0 that Bombardier’s C-Series prices to US carriers did not harm the 737 MAX 7, thereby removing a valid reason to impose duties.

A spokesperson from Bombardier could not be reached for comment immediately.

In January, a spokesperson from Boeing, which said that the company is currently reviewing the said decision, said that it would not consider options such as an appeal prior to seeing the reasoning of the ITC.

Boeing has the choice of appealing the said decision at a trade dispute settlement panel under the North American Free Trade Agreement (Nafta) or the Court of International Trade in New York.

However, in the negotiations to modernise Nafta, Robert Lighthizer, a US Trade Representative, has pushed to scrap the process of Nafta to settle disputes regarding trade, which he states is biased against the US.

The decision of the ITC was the most recent twist in the trade relations between the United States and Canada that have been complicated by the disputes over tariffs on US milk and Canadian lumber and the desire of Donald Trump, the President of the United States, to renegotiate or even leave Nafta.

Boeing alleged that it was made to discount its 737 narrow-bodies in order to be able to compete with Bombardier, which it stated utilised government subsidies in order to drop the C-Series during the sale in 2016.

However, the report, said that the C-Series would not potentially depress the prices of jets that are made in the United States and that Bombardier is not likely to offer other potential buyers the same discounts that are provided to Delta.