Canadian airplane maker Bombardier scored an unexpected victory today over Boeing when the U.S. International Trade Commission unanimously rejected a plan to levy a 292 percent tariff on the company’s U.S. sales.
In a statement, the commission said it determined that U.S. industry “is not materially injured or threatened with material injury” by imports of Bombardier’s 100- to 150-seat CSeries jets.
That runs counter to Boeing’s claim that Bombardier’s Canadian government subsidies would threaten its sales of 737 jets. The U.S. Commerce Department sided with Boeing and called for the tariff, but it was up to the ITC to approve the penalty.
The decision suggests that Bombardier’s multibillion-dollar sale of up to 125 single-aisle CS100 jets to Delta Air Lines, announced last April, will go forward. In a statement, Delta said it was pleased with the ruling and emphasized that Boeing “offers no viable alternative.” During the deliberations, Delta officials said the 737 jets that Boeing offered did not suit their needs.
Delta said it “looks forward to introducing the innovative CS100 to its fleet for the benefit of Delta’s employees, customers and shareholders.”
Bombardier called the decision a “victory for innovation, competition and the rule of law,” but Boeing said it was disappointed that the ITC failed to recognize the harm it suffered from what it called illegal government subsidies.
Boeing said it would continue to document any harm to Boeing or its suppliers caused by Bombardier’s pricing.
T. Augustine Lo, an attorney at the Seattle office of international law firm Dorsey & Whitney, said in a statement that today’s ruling “delivered a major blow to Boeing’s efforts to stem Canadian import competition from Bombardier.”
“The parties to this dispute could still seek review in court,” Lo said. “Thus, we should not be surprised if Boeing’s response to this ITC decision is to file a lawsuit in the days or weeks ahead. However, the Trump administration’s rhetoric against foreign imports has suffered a major setback today because of the checks and balances in our legal system.”
The dispute has contributed to trade frictions between the U.S. and Canada, which have suffered due to the Trump administration’s insistence on renegotiating the North American Free Trade Agreement. Boeing has suffered as well: In December, Canada scrapped plans to purchase billions of dollars’ worth of Boeing F/A-18 Super Hornet fighter jets.
Canada isn’t the only country on Bombardier’s side: Because some components of the CS100 are made in Northern Ireland, today’s decision was cheered by leaders in Britain and Ireland.
“I welcome this decision, which is good news for British industry,” British Prime Minister Theresa May said in a tweet.
Irish Prime Minister Leo Varadkar tweeted as well, saying he was “very pleased” by the outcome. “Many jobs in Belfast more secure tonight,” he wrote.
The trade spat has been further complicated by revelations that Airbus struck a deal with Bombardier to produce CS100 jets in the U.S., and that Boeing is working on its own deal with Brazil’s Embraer, Bombardier’s closest rival in the commercial airline market.