US Imposes 220 Pct Duty on Bombardier Aircraft

September 26, 2017

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The United States has imposed a 220 percent duty on aircraft imported from Canada, in response to a petition by Boeing on the terms of a Delta Air Lines order for 75 Bombardier CSeries planes.

The US Commerce Department announced the preliminary determination on Tuesday, imposing a 219.63 percent countervailing duty after finding that “exporters of this merchandise received countervailable subsidies” in financing the aircraft.

The Commerce Department defines countervailable subsidy as “financial assistance from a foreign government that benefits the production of goods from foreign companies.”

The Delta CSeries order, announced in April 2016, had a total list price value of USD$5.38 billion, or $71.8 million per aircraft, but industry estimates suggest the actual price may have been as low as a third of that.

Boeing objected to the order, saying it amounted to dumping as the price paid was $19.6 million per aircraft.

Bombardier “strongly disagreed” with the preliminary decision saying “The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multi-billion dollar aircraft programmes.”

The Montreal based company said Delta wants to fly the CSeries, but Boeing wants to prevent the sale. It said Boeing did not compete for the Delta order and because it abandoned the segment of the market the aircraft serves, no harm was done.

The first of Delta’s CSeries aircraft is due for delivery early next year with entry into service expected in the spring.

The Commerce Department’s duty on Bombardier aircraft imported into the United States will only take effect if the US International Trade Commission rules in favour of Boeing in a final decision due next year.