US Trade Panel Overturns Bombardier Tariffs

Ruling Due In Boeing Trade Spat; Trump At Davos: Investing Action Plan

Canadian officials had protested the tariff, with its minister of foreign affairs saying at the time that it was "clearly aimed at eliminating Bombardier's C Series aircraft from the USA market".

The U.S. International Trade Commission in Washington, D.C., ruled that Bombardier's C Series passenger jets "from Canada do not injure U.S. industry". As a result of the decision, the U.S. Commerce Department will not collect a penalty from Bombardier.

A spokesperson for Bombardier said the ITC's decision was "a victory for innovation, competition and the rule of law".

A spokesperson for Boeing said it was "disappointed" by the ITC's decision and that it would "review the detailed conclusions when they are released".

Bombardier also argued that the commission should reject the petition in part due to its new partnership with Airbus SE, which will see the European planemaker take control of the CSeries program and assemble US -bound jets in a facility in Alabama.

Chicago-based Boeing first brought the case to the Commerce Department previous year, arguing Canadian and British governments were illegally subsidizing the C-Series's costs.

The case came mostly in response to steep tariffs the Trump administration has levied on Canada's softwood lumber industry, which is vital to US home building.

Some analysts said it was time for Boeing to cut its losses.




The trade dispute has spilled over to Boeing's customers.

In key testimony before the ITC previous year, Greg May, senior vice president of fleet and supply-chain management at Delta, said, "It would be wrong to suggest that Boeing lost sales to Delta because we purchased the CS100".

Even though a Boeing appeal is more than expected, either in USA courts or in the World Trade Organization, it is a bittersweet victory for Bombardier.

The decision Friday is a significant blow to Chicago-based Boeing and gives an unexpected boost to Airbus, Boeing's rival in the commercial airline market.

Before that, Bombardier had struggled to gain a USA foothold while production of the single-aisle plane fell more than two years behind schedule and costs ballooned to more than US$2 billion over budget.

Bombardier's CEO Alain Bellemare told CNBC after the ruling that he just met with his Airbus counterpart about the integration plan and that it was not yet clear when and from where the Canadian company's planes would be manufactured and delivered. "It is also a victory for U.S. airlines and the United States travelling public", Bombardier said. The new assembly line, with an estimated cost of $300 million, would complement Bombardier's factory in Mirabel, Quebec. "With the cultural context that's prevailing in the United States right now, with the protectionism and the Trump administration that's in place, I was convinced, and a lot of people were also convinced, that they'd support the decision and go forward with the Boeing complaint". Its class B shares ended up more than 15% at C$3.34.

T. Augustine Lo, an attorney at global law firm Dorsey & Whitney in Seattle, said their vote vindicating the CSeries is a major blow to the anti-free-trade tendencies that have been growing in the U.S.

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