U.S. confirms 300% duties on disputed Bombardier jets, a win for Boeing

Bombardier's C Series 100- to 150-seat aircraft will face antidumping and countervailing duties of nearly 300 percent if shipped into the USA, the Commerce Department announced December 20.

The decision follows the Commerce Department's preliminary recommendation of duties of that amount on Bombardier's C Series jets, earlier this autumn.

Boeing filed the case against its Canadian rival after Delta Air Lines (NYSE: DAL - news) ordered 75 of the C-Series planes that can seat 100-150 passengers.

The decision is subject to final approval by the US International Trade Commission, a quasi-judicial agency, which is due February 1, though it rarely differs from Commerce.

Boeing called for action from U.S. authorities saying the C-Series competes with its small 737 jet, a point refuted by Bombardier.

"Unfortunately, the decision of the Department of Commerce is divorced from this reality and ignores commercial practices of the aeroespacial industry, including the launching price and the financing of multimillion airplane programmes", Bombardier said in a statement.

"Today's decision validates Boeing's complaints regarding Bombardier's pricing in the United States, pricing that has harmed our workforce and US industry", Boeing said in a statement. However, the decision had been temporary while the US decided how to best proceed in the matter.

A ruling by the ITC that the CSeries pricing and government support harmed Boeing will add another setback to Bombardier's commercial aircraft business.

The inquiry now moves to the United States global trade commission, which will examine if the dumping and subsidies caused injury to Boeing.

"A single large order, like Bombardier's sale to Delta, takes years of demand out of the market".

Delta CEO Ed Bastian told Business Insider in a recent interview that the C Series plane is already made with at least 50 percent US parts and moving its assembly to Alabama would boost that percentage up to about 60 percent. He says nothing justifies such duties.

European planemaker Airbus SE, which is buying a controlling stake in the CSeries program and has a competing plane, has said it would add a second CSeries production line to a factory in Alabama, making it a USA product for domestic airlines. The U.S. decision means that the relations between the country and its neighbor, Canada are likely to be terribly strained. Boeing suffered another setback last week when Delta announced it was ordering 100 Airbus planes to renew its narrow-body fleet in a move that analysts viewed as a snub of Boeing over the case.

Bombardier says more than half of the value of CSeries content comes from the United States, including engines by Pratt & Whitney.

  • Anthony Vega