U.S. to impose tariffs on Canadian jetliners
The department suggested the tariffs could be as high as 219 percent. The action threatens to further inflame trade tensions between the two North American neighbors.
The U.S. government moved to impose tariffs on Canadian jetliners Tuesday when it ruled in favor of a complaint by U.S. aircraft maker Boeing that claimed rival Bombardier is receiving unfair government subsidies.
The department suggested the tariffs could be as high as 219 percent. The action threatens to further inflame trade tensions between the two North American neighbors. Earlier this year, the Commerce Department moved to impose new duties on the import of Canadian soft lumber and President Trump has signaled his interest to renegotiate the terms of the North America Free Trade Agreement between the two nations.
Bombardier has sold aircraft to U.S. carriers for decades. But Boeing's complaint follows a multibillion-dollar deal struck between Bombardier and Atlanta-based Delta Air Lines for 75 C-series CS-100's, a commercial airplane that seats about 100 people.
Following the deal, Boeing formally asked the U.S. Commerce Department to investigate what it called illegal government subsidies and unfair pricing practices that have allegedly given the Canadian company an unfair advantage as it competes for business in the United States.
"Without bailout money from Ottawa and the Quebec provincial government \[Bombardier\] would probably be bankrupt," said Loren Thompson, a defense consultant whose think tank gets funding from Boeing. "What Boeing is really saying here is that Bombardier has an unfair advantage because Canadian taxpayers are covering part of its cost."
Bombardier is slated to begin delivering the planes next year, and any new duties imposed by the Commerce Department would increase the cost of the order to the aircraft manufacturer. The exact amount of any new tariffs would not likely be finalized until early next year. Even then, Canada could potentially pursue a case against the United States at the World Trade Organization.
An ultimate decision to impose tariffs could also have ripples in Northern Ireland, where Bombardier employs about 4,000 people.
The Trump administration did not take an official position on the matter before Tuesday evening's trade decision. But British and Canadian leaders have publicly urged the Trump administration not to impose tariffs.