Canada: Bombardier-Boeing aerospace war heats up

By Barry Ellsworth

TRENTON, Ont. (AA) – The premier of Quebec province urged Canada on Wednesday to take a tough stance against Boeing after the U.S. slapped a 219 percent tariff on airplanes sold to Delta Air Lines by Montreal-based Bombardier.

“Not a bolt, not a part, not a plane from Boeing [should enter] Canada until this conflict is resolved in a satisfactory way,” Philippe Couillard said at a news conference.

The U.S. Commerce Department levy can be appealed but it represents a major victory for the American aerospace manufacturer that complained Quebec had unfairly subsidized production of Bombardier’s CSeries jets. As much as 125 are to be sold to Delta for US$6 billion.

The decision can be appealed to the U.S. international trade court or under the dispute mechanism allowed in the North American Free Trade Agreement (NAFTA) that is currently under renegotiation by the signatories – Canada, the United States and Mexico.

Some observers fear the aerospace trade war could interfere with the NAFTA talks.

“This is very disappointing for Canada,” Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, told Canadian media. “Inevitably, any of these side issues runs the risk of contaminating the negotiations. That’s not good.”

Boeing argued Bombardier was subsidized by a US$1 billion investment in Bombardier’s CSeries jet manufacturing. Couillard countered it was an investment, not a subsidy, and added that Boeing has benefited from decades of U.S. government assistance.

As well, Boeing did not have any suitable jets with which to bid at the time the Delta deal was awarded to Bombardier in 2016.

More rulings on Boeing’s subsidy charges against Bombardier in other deals are expected next week and in the spring.

If the CSeries deal is dead, it could hurt the U.S. economy as well as Bombardier – more than half of the jet proponents are made by U.S.-based companies and the manufacturing of the parts supports 22,000 jobs in 17 states.

Couillard vowed to fight the ruling until a decision is reached in Canada’s favor.

“Boeing may have won the battle but let me tell you the war is far from over – and we shall win,” he said.