Bombardier loses battle with Boeing

The U.S. Commerce Department has slapped preliminary anti-subsidy duties on Bombardier’s CSeries jets after rival Boeing accused Canada of unfairly subsidizing the aircraft. As Laura Frykberg reports, the move is likely to strain trade relations between the neighbours and cause problems in Britain where Bombardier’s Northern Ireland factory employs thousands.

(REUTERS/BOMBARDIER) – A bruise for Bombardier, after its battle with Boeing.

The Canadian jet maker ordered to pay an almost 220 percent import tariff, on its U.S.-bound C-Series jets.

OANDA SENIOR MARKET ANALYST, CRAIG ERLAM,

“It’s a huge tariff, effectively tripling the cost of the planes and creating significant price barriers for fall bombarding.”

The preliminary ruling by the U.S. Commerce Department, follows accusations by Boeing, that Canada gave Bombardier unfair subsidies on its jets, landing them in the U.S. market below cost.

For some though, that allegation, smells of hypocrisy.

CMC MARKETS ANALYST, MICHAEL HEWSON,

“If you actually look at the history of what’s gone on here, there’s an element of protectionism in Boeing’s stance. Yes there some government involvement in shoring up Bombardier’s finances, but to me it’s no different to the way that the U.S. government bailed out GM, General Motors.”

The knock-on effect of the ruling could be here, in Northern Ireland’s capital.

Bombardier is one of Northern Ireland’s biggest employers, about 1,000 workers alone, are making the C-Series jets.

OANDA SENIOR MARKET ANALYST, CRAIG ERLAM,

“It’s not really known at this stage what kind of an impact it will have on jobs of course, they employ 4000 people, so you’d expect there to be some impact here. Otherwise Theresa May may not have got involved in the process I’m sure.”

UK Prime Minister Theresa May has called the outcome bitterly disappointing, and vowed to protect jobs in Belfast.

Not least because her government depends on support from Northern Ireland’s Democratic Unionist Party.

She doesn’t have long though, a final ruling on the case is expected early in 2018.

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