U.S. trade body backs Canadian plane maker Bombardier against Boeing

From Reuters - January 26, 2018

MONTREAL/WASHINGTON (Reuters) - A U.S. trade commission on Friday handed an unexpected victory to Bombardier Inc against Boeing Co, in a ruling that allows the Canadian company to sell its newest jets to U.S. airlines without heavy duties, sending Bombardiers shares up 15 percent.

The U.S. International Trade Commissions unanimous decision is the latest twist in U.S.-Canadian trade relations that have been complicated by disputes over tariffs on Canadian lumber and U.S. milk and President Donald Trumps desire to renegotiate or even abandon the North American Free Trade Agreement (NAFTA).

Trump, who did not weigh in on the dispute personally, took his America First message to the worlds elite on Friday, telling a summit that the United States would no longer turn a blind eye to what he described as unfair trade practices.

The ITC commissioners voted 4-0 that Bombardiers prices did not harm Boeing and discarded a U.S. Commerce Department recommendation to slap a near 300 percent duty on sales of the companys 110-to-130-seat CSeries jets for five years. It did not give a reason immediately.

U.S. Commerce Secretary Wilbur Ross said in a statement that the commissions finding shows how robust our system of checks and balances is.

Boeings shares closed flat.

Its reassuring to see that facts and evidence matter, said Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington. This part of the trade policy process works unimpeded despite President Trumps protectionist rhetoric.

The decision will also help Bombardier sell the CSeries in the United States by removing a huge amount of uncertainty, at a time when its Brazilian rival Embraer is bringing its new E190-E2 jet to market, a source familiar with the Canadian plane and train makers thinking said.

The ITC had been expected to side with Chicago-based Boeing. The company alleged it was forced to discount its 737 narrow-bodies to compete with Bombardier, which it said used government subsidies to dump the CSeries during the 2016 sale of 75 jets at absurdly low prices to Delta Air Lines.

Bombardier called the trade case self-serving after Boeing revealed on Dec. 21 that it was discussing a potential combination with Embraer. Boeing denied the trade case was motivated by those talks.


The dispute may not be over.


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