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U.S. imposing 220% duty on Bombardier CSeries planes


Ryan Strome

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Well I guess Canada will be buying the f35.

 

https://www.google.ca/amp/www.cbc.ca/amp/1.4308590

 

The U.S. Department of Commerce has clobbered aerospace giant Bombardier with a hefty 220 per cent countervailing duty on the sale of its CS100 commercial jets to a U.S. airline following a trade complaint from an American rival.

The department ruled that Bombardier benefited from improper government subsidies, a finding that deals a blow to the Montreal-based company's chances in its dispute with U.S. rival Boeing.

 

Bombardier responded with a statement saying, "The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs."

The company argues that "U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition."

 

 

Meanwhile, Boeing, which had complained that Bombardier inked a deal with Delta Air Lines for up to 125 of the jets by offering the planes at below-market price, wasted no time Tuesday in declaring victory.

"Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing's global supply chain," the company said in a statement.

The dispute is not about limiting innovation or competition, it continued, but rather "has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements."

The financial penalties aren't officially due until Bombardier delivers the first CS100 to Delta sometime in the spring.

Final ruling expected in March

The key will be whether U.S. officials find that the deal between Bombardier and Delta actually hurt Boeing's business, an issue that's not expected to yield a finding for at least six months.

But today's ruling does give Boeing momentum as the dispute drags on, and more leverage in any future talks between the Trudeau government and Boeing to reach a negotiated settlement.

 

Tuesday's ruling was a stunning turn in the dispute, as Boeing had been asking for an 80 per cent duty.

The list price for the planes is around $6 billion. But the actual amount of money involved in the deal has not been made public, and Boeing has alleged that it is much less.

The case has major implications for Bombardier as it could not only endanger its deal with Delta but also hinder future sales in the U.S. and hurt Canadian aerospace companies that work with Bombardier.

Speaking before the ruling, Prime Minister Justin Trudeau promised to continue to stand with Bombardier and Canada's aerospace industry. He also once again threatened to cut government ties with Boeing.

"Certainly we won't deal with a company that's attacking us and attacking thousands of Canadian jobs," Trudeau said outside the House of Commons.

Foreign Affairs Minister Chrystia Freeland said in a statement issued Tuesday night, that the U.S. duty is "is clearly aimed at eliminating Bombardier's C Series aircraft from the U.S. market."

 

With one preliminary ruling out of the way, the Commerce Department will now turn its attention to whether Bombardier "dumped" its CS100s into the U.S. market by selling them below cost.

That finding is scheduled for Oct. 4, but could be delayed.

Industry veterans told Reuters that this is the first time in memory duties have been considered on aircraft, following a 1980 agreement to free aircraft trade among 32 of the world's leading trading powers.

Did the deal hurt Boeing?

The question of whether the Bombardier-Delta deal hurt Boeing is being tackled by the U.S. International Trade Commission, whose ruling likely won't come out until spring.

The commission's ruling will be the key to whether any duties slapped on the CS100s become permanent, or whether the case is dismissed, all duties paid are refunded and the Bombardier-Delta deal can go ahead as planned.

Even then, however, either side can appeal the entire case to the U.S. Court of International Trade, bring it before NAFTA dispute bodies or even take the matter to the World Trade Organization.

That could not only drag the case out but also leave a cloud of uncertainty hovering over Bombardier, and affect its ability to sell more planes into the U.S. market or overseas.

Quebec Finance Minister Carlos Leitao, whose government invested $1 billion US for a 49.5 per cent stake in the CSeries commercial jet program last year, said he was confident Bombardier would beat Boeing.

 

But he tempered his optimism by noting that it could take a long time to resolve the case, which Leitao said could hurt Bombardier — and which is why Quebec will continue to support the company.

"At the end of the day, as often happens in this type of dispute, the Canadian side will win," he told The Canadian Press in New York. "Now, that day could be a very long day, so that's where the risks come from."

It was the second bit of bad news for Bombardier on Tuesday, after two European railway manufacturers announced they were merging and would present a united front against the Montreal-based company.

But there was also a glimmer of good news, after a senior Bombardier official said the firm was hoping to close several deals with Chinese airlines.

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3 hours ago, Ryan Strome said:

Well I guess Canada will be buying the f35.

 

https://www.google.ca/amp/www.cbc.ca/amp/1.4308590

 

The U.S. Department of Commerce has clobbered aerospace giant Bombardier with a hefty 220 per cent countervailing duty on the sale of its CS100 commercial jets to a U.S. airline following a trade complaint from an American rival.

The department ruled that Bombardier benefited from improper government subsidies, a finding that deals a blow to the Montreal-based company's chances in its dispute with U.S. rival Boeing.

 

Bombardier responded with a statement saying, "The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs."

The company argues that "U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition."

 

 

Meanwhile, Boeing, which had complained that Bombardier inked a deal with Delta Air Lines for up to 125 of the jets by offering the planes at below-market price, wasted no time Tuesday in declaring victory.

"Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing's global supply chain," the company said in a statement.

The dispute is not about limiting innovation or competition, it continued, but rather "has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements."

The financial penalties aren't officially due until Bombardier delivers the first CS100 to Delta sometime in the spring.

Final ruling expected in March

The key will be whether U.S. officials find that the deal between Bombardier and Delta actually hurt Boeing's business, an issue that's not expected to yield a finding for at least six months.

But today's ruling does give Boeing momentum as the dispute drags on, and more leverage in any future talks between the Trudeau government and Boeing to reach a negotiated settlement.

 

Tuesday's ruling was a stunning turn in the dispute, as Boeing had been asking for an 80 per cent duty.

The list price for the planes is around $6 billion. But the actual amount of money involved in the deal has not been made public, and Boeing has alleged that it is much less.

The case has major implications for Bombardier as it could not only endanger its deal with Delta but also hinder future sales in the U.S. and hurt Canadian aerospace companies that work with Bombardier.

Speaking before the ruling, Prime Minister Justin Trudeau promised to continue to stand with Bombardier and Canada's aerospace industry. He also once again threatened to cut government ties with Boeing.

"Certainly we won't deal with a company that's attacking us and attacking thousands of Canadian jobs," Trudeau said outside the House of Commons.

Foreign Affairs Minister Chrystia Freeland said in a statement issued Tuesday night, that the U.S. duty is "is clearly aimed at eliminating Bombardier's C Series aircraft from the U.S. market."

 

With one preliminary ruling out of the way, the Commerce Department will now turn its attention to whether Bombardier "dumped" its CS100s into the U.S. market by selling them below cost.

That finding is scheduled for Oct. 4, but could be delayed.

Industry veterans told Reuters that this is the first time in memory duties have been considered on aircraft, following a 1980 agreement to free aircraft trade among 32 of the world's leading trading powers.

Did the deal hurt Boeing?

The question of whether the Bombardier-Delta deal hurt Boeing is being tackled by the U.S. International Trade Commission, whose ruling likely won't come out until spring.

The commission's ruling will be the key to whether any duties slapped on the CS100s become permanent, or whether the case is dismissed, all duties paid are refunded and the Bombardier-Delta deal can go ahead as planned.

Even then, however, either side can appeal the entire case to the U.S. Court of International Trade, bring it before NAFTA dispute bodies or even take the matter to the World Trade Organization.

That could not only drag the case out but also leave a cloud of uncertainty hovering over Bombardier, and affect its ability to sell more planes into the U.S. market or overseas.

Quebec Finance Minister Carlos Leitao, whose government invested $1 billion US for a 49.5 per cent stake in the CSeries commercial jet program last year, said he was confident Bombardier would beat Boeing.

 

But he tempered his optimism by noting that it could take a long time to resolve the case, which Leitao said could hurt Bombardier — and which is why Quebec will continue to support the company.

"At the end of the day, as often happens in this type of dispute, the Canadian side will win," he told The Canadian Press in New York. "Now, that day could be a very long day, so that's where the risks come from."

It was the second bit of bad news for Bombardier on Tuesday, after two European railway manufacturers announced they were merging and would present a united front against the Montreal-based company.

But there was also a glimmer of good news, after a senior Bombardier official said the firm was hoping to close several deals with Chinese airlines.

Bombardier aircraft will flow to China at the same rate as our oil. It wouldn't be surprising that if Trans Mountain stalls, so do aerospace sales etc.

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17 minutes ago, clam linguine said:

Bombardier's will flow to China at the same rate as our oil. It wouldn't be surprising that if Trans Mountain stalls, so do aerospace sales etc.

This really is a messed up case. Bombardier is pretty much a crown corporation but Boeing also receives government/tax payer handouts. What makes it even more strange is Boeing wasn't even competing for that contract which gives Bombardier a good shot a winning in an appeal.

 

What I do know is JT needs to eat his words and scrap the super hornet no matter the outcome and purchase the f35 the jet the military wants. Hell Lockheed martin is saying the price will be pretty much the same as the super hornet.

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Lol just imagine Bombardier fires back with state, federal and military funding for Boeing which they've enjoyed for decades.

 

Should be funny really.

 

American policy and trade ineptitude based on their belief in their own greatness is ruining what was once a solid nation of creators but now a fattened lazy nation of consumers

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18 minutes ago, Ryan Strome said:

This really is a messed up case. Bombardier is pretty much a crown corporation but Boeing also receives government/tax payer handouts. What makes it even more strange is Boeing wasn't even competing for that contract which gives Bombardier a good shot a winning in an appeal.

 

What I do know is JT needs to eat his words and scrap the super hornet no matter the outcome and purchase the f35 the jet the military wants. Hell Lockheed martin is saying the price will be pretty much the same as the super hornet.

China actually "needs" or at least very badly wants access to our oil. We could parlay that into aerospace and tech deals like never before. The U.S. can play it pretty tough with us now that they have shale. We should move away from them for trade wherever possible. 

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11 minutes ago, Warhippy said:

Lol just imagine Bombardier fires back with state, federal and military funding for Boeing which they've enjoyed for decades.

 

Should be funny really.

 

American policy and trade ineptitude based on their belief in their own greatness is ruining what was once a solid nation of creators but now a fattened lazy nation of consumers

:lol:. Weren't you given a hard time before by an American or two for making this generalization in another thread?

 

I'm willing to bet our boy @SabreFan1 is in great shape.^_^

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2 minutes ago, Ryan Strome said:

:lol:. Weren't you given a hard time before by an American or two for making this generalization in another thread?

 

I'm willing to bet our boy @SabreFan1 is in great shape.^_^

I'm not wrong.  The US is the most obese nation in the world and leads the world for consumption.

 

That's not incorrect at all

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2 hours ago, Ryan Strome said:

:lol:. Weren't you given a hard time before by an American or two for making this generalization in another thread?

 

I'm willing to bet our boy @SabreFan1 is in great shape.^_^

Our food is terrible and mostly processed.  For my age though I'm in decent shape.  Nothing like the great shape I was in my younger years thanks to various problems.

 

@Warhippy Canadians shouldn't throw too many stones though.  You guys are starting to pick up our bad food habits and are already the 7th fattest people in the world.  Your government is better at cracking down on too many bad things in your food chain so hopefully Canada won't continue to go higher.

 

http://www.marketwatch.com/story/the-us-is-the-most-obese-nation-in-the-world-just-ahead-of-mexico-2017-05-19

MW-FM801_obseit_20170519065202_NS.jpg?uu

 

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3 hours ago, Ryan Strome said:

Well I guess Canada will be buying the f35.

 

https://www.google.ca/amp/www.cbc.ca/amp/1.4308590

 

The U.S. Department of Commerce has clobbered aerospace giant Bombardier with a hefty 220 per cent countervailing duty on the sale of its CS100 commercial jets to a U.S. airline following a trade complaint from an American rival.

The department ruled that Bombardier benefited from improper government subsidies, a finding that deals a blow to the Montreal-based company's chances in its dispute with U.S. rival Boeing.

 

Bombardier responded with a statement saying, "The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs."

The company argues that "U.S. trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition."

 

 

Meanwhile, Boeing, which had complained that Bombardier inked a deal with Delta Air Lines for up to 125 of the jets by offering the planes at below-market price, wasted no time Tuesday in declaring victory.

"Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing's global supply chain," the company said in a statement.

The dispute is not about limiting innovation or competition, it continued, but rather "has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements."

The financial penalties aren't officially due until Bombardier delivers the first CS100 to Delta sometime in the spring.

Final ruling expected in March

The key will be whether U.S. officials find that the deal between Bombardier and Delta actually hurt Boeing's business, an issue that's not expected to yield a finding for at least six months.

But today's ruling does give Boeing momentum as the dispute drags on, and more leverage in any future talks between the Trudeau government and Boeing to reach a negotiated settlement.

 

Tuesday's ruling was a stunning turn in the dispute, as Boeing had been asking for an 80 per cent duty.

The list price for the planes is around $6 billion. But the actual amount of money involved in the deal has not been made public, and Boeing has alleged that it is much less.

The case has major implications for Bombardier as it could not only endanger its deal with Delta but also hinder future sales in the U.S. and hurt Canadian aerospace companies that work with Bombardier.

Speaking before the ruling, Prime Minister Justin Trudeau promised to continue to stand with Bombardier and Canada's aerospace industry. He also once again threatened to cut government ties with Boeing.

"Certainly we won't deal with a company that's attacking us and attacking thousands of Canadian jobs," Trudeau said outside the House of Commons.

Foreign Affairs Minister Chrystia Freeland said in a statement issued Tuesday night, that the U.S. duty is "is clearly aimed at eliminating Bombardier's C Series aircraft from the U.S. market."

 

With one preliminary ruling out of the way, the Commerce Department will now turn its attention to whether Bombardier "dumped" its CS100s into the U.S. market by selling them below cost.

That finding is scheduled for Oct. 4, but could be delayed.

Industry veterans told Reuters that this is the first time in memory duties have been considered on aircraft, following a 1980 agreement to free aircraft trade among 32 of the world's leading trading powers.

Did the deal hurt Boeing?

The question of whether the Bombardier-Delta deal hurt Boeing is being tackled by the U.S. International Trade Commission, whose ruling likely won't come out until spring.

The commission's ruling will be the key to whether any duties slapped on the CS100s become permanent, or whether the case is dismissed, all duties paid are refunded and the Bombardier-Delta deal can go ahead as planned.

Even then, however, either side can appeal the entire case to the U.S. Court of International Trade, bring it before NAFTA dispute bodies or even take the matter to the World Trade Organization.

That could not only drag the case out but also leave a cloud of uncertainty hovering over Bombardier, and affect its ability to sell more planes into the U.S. market or overseas.

Quebec Finance Minister Carlos Leitao, whose government invested $1 billion US for a 49.5 per cent stake in the CSeries commercial jet program last year, said he was confident Bombardier would beat Boeing.

 

But he tempered his optimism by noting that it could take a long time to resolve the case, which Leitao said could hurt Bombardier — and which is why Quebec will continue to support the company.

"At the end of the day, as often happens in this type of dispute, the Canadian side will win," he told The Canadian Press in New York. "Now, that day could be a very long day, so that's where the risks come from."

It was the second bit of bad news for Bombardier on Tuesday, after two European railway manufacturers announced they were merging and would present a united front against the Montreal-based company.

But there was also a glimmer of good news, after a senior Bombardier official said the firm was hoping to close several deals with Chinese airlines.

I actually hope Bombardier goes belly up, can't stand that company

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10 hours ago, SabreFan1 said:

They can sue in both the US courts and international courts...  I'd imagine that they have a decent chance of winning.

Dan Ikenson, a trade analyst with the Cato Institute agrees:

http://www.msn.com/en-ca/money/topstories/bombardier-belted-with-america-first-stunner/ar-AAsvQfy?li=AAggNb9

Quote

 

One trade-policy analyst at Washington's free-market Cato Institute criticized the U.S. department that handled the initial decision.

He said later arbiters won't likely be as pliant to Boeing.

The raison d'etre of the Department of Commerce's enforcement unit is to protect U.S. companies, said Dan Ikenson — right down to advising petitioners on how best to design their complaint. It sides with American petitioners more than 90 per cent of the time and will certainly clobber Bombardier again with a new anti-dumping duty as early as next week, he said.

''The Commerce Department is a pit bull,'' Ikenson said.

''They see it as a sign of success (when they impose a duty)... They're political.''

It's different in other forums, he said.

The case later heads back to the U.S. International Trade Commission, which must determine whether Boeing has actually suffered and, if not, could cancel the duties. The ITC sides with U.S. petitioners closer to 60 per cent of the time, Ikenson said.

And he's urging the Canadians to try their luck in a third venue: the U.S. domestic court system's Court of International Trade. He said that court is even friendlier to foreigners, siding with them in a majority of cases.

He said that's a smarter route than a fourth venue: NAFTA's Chapter 19 dispute process. He said U.S. policy-makers might find Chapter 19 easier to ignore, given that the current Trump administration hates it, wants to get rid of it in the new NAFTA, and might relish the opportunity to pick a fight challenging its authority.

''I'm convinced the courts will find mischief (from Boeing),'' he said.

 

10 hours ago, Ryan Strome said:

:lol:. Weren't you given a hard time before by an American or two for making this generalization in another thread?

 

I'm willing to bet our boy @SabreFan1 is in great shape.^_^

Physical shape? Probably. But as a fellow Bills fan, I can tell you his mental "shape" should probably hit the gym...

 

(Of course, as Canuck fans, we all know how it feels to be a fan of the Sabres)

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10 hours ago, clam linguine said:

China actually "needs" or at least very badly wants access to our oil. We could parlay that into aerospace and tech deals like never before. The U.S. can play it pretty tough with us now that they have shale. We should move away from them for trade wherever possible. 

There is already an order for C Series jets in the works with China. The C Series currently supports 23k jobs in the US, with 53% of the parts for the aircraft coming from US suppliers, but those jobs are not threatened by the ruling because they are supported by sales anywhere in the world, not just the US. I agree, we need to move away from the US on trade big time. 

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