C-Series Tariff Sours Relationships For Scant Gain.jpg Bombardier

C-Series Tariff Sours Relationships For Scant Gain

Import tariff of 219% imposed on Sept. 27.

Moves by the U.S. to slap a 219% tariff on the import of Bombardier C Series aircraft have provoked howls of protest and talk of retaliation in Canada and the UK, where the aircraft are made.

Bombardier employs about 4,000 people in its Northern Ireland factory, which manufactures the CSeries’ wings, and British ministers have suggested that Boeing could lose out on UK defense contracts if the tariffs are confirmed.

Of course, that is a big ‘if’; the U.S. Commerce Department still needs to confirm its preliminary decision, and the tariff would need to be approved by US International Trade Commission, even after which it could still be challenged at the WTO by Canada.

Like the UK, Canada has threatened to freeze Boeing out of defense contracts, although neither country has mentioned retaliatory tariffs on Boeing commercial aircraft.

Perhaps this is because neither country fears that the tariffs will ultimately be applied. In part, this may be down to a perception of the current administration as a lame-duck presidency, but also because it’s difficult to spot “the harmful effects of unfair subsidization” on US workers that the tariff is designed to alleviate.

Mainly, this is because no U.S. manufacturer produces a competing product to the C Series. If any workers were harmed by Delta’s cut-price deal for 75 C Series, it was those in Brazil working for Bombardier’s rival, Embraer.

And while it’s true that the CSeries has received hefty state aid, and credible that Delta did get the aircraft at below cost price, such tactics have been a feature of many aircraft programs in the past, including those of Boeing. Meanwhile, plenty of engineers at Pratt & Whitney are involved in producing the PW1500G engines that power the CSeries, so tariffs may in fact hurt US workers rather than help them.

With all that in mind, one wonders why Boeing has pursued this complaint so aggressively, when the potential harm from retaliation or trashed good will seems so much greater than any potential gain.

It’s been suggested that Bombardier’s move into larger aircraft has worried Boeing about a nascent competitor that it is now trying to squash at birth.

If that’s the case, it seems a massive overreaction. True, before the Delta order the C Series was floundering, but Bombardier’s big discount has hardly proved the kickstart it might have hoped for: Since the Delta deal over a year ago the CSeries has gained just one new airline customer – local flag carrier Air Canada.

TAGS: Airframe
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