UK Slams Tariffs On Bombardier: "This Is Not What We Expect From A Long-Term Partner"

It appears the Commerce Department's preliminary ruling, issued late last night, to slap a 220% tariff on Canadian aircraft manufacturer Bombardier could trigger an all-out trade war between the UK and Canada (on one side) and the US (on the other) as public officials in the UK and Canada blasted the ruling and threatened retaliation should the sanctions, which still need to be approved by the US International Trade Commission, become permanent.

Earlier today, the Commerce Department ruled that Bombardier's jets should face the levy because the company received anticompetitive government subsidies. The ruling comes after Boeing said the Bombardier C-Series jet would not exist without hundreds of millions of dollars in launch funding from the governments of Canada and Britain, or a $2.5 billion equity infusion from the province of Quebec and its largest pension fund in 2015. Boeing brought the complaint after Delta Air Lines agreed in April 2016 to purchase 75 C-Series jets, an order worth some $5 billion.

The preliminary ruling - which comes as the US, Canada and Mexico are holding their fourth meeting to renegotiate Nafta - has met with praise from Boeing, and criticism from virtually everybody else involved.

The UK, which does a brisk business with Boeing, is threatening to cut ties with the company if the decision against Bombardier is finalized. The reason? Bombardier has a large plant in Belfast, employing some 4,200 people in Northern Ireland, a region that the UK's ruling conservative party relies on heavily for support. If Bombardier, which is already struggling, takes another hit, those people could lose their jobs, potentially threatening the conservatives' tenuous grip on power after losing their majority in snap elections over the summer, according to Reuters. 

UK Defense Minister Michael Fallon said in a TV interview today that the ruling could jeapordize Boeing's business relationship with the UK government.

“This is not the behavior we expect from Boeing and it could indeed jeopardize our future relationship with them,” British Defence Secretary Michael Fallon told reporters in Belfast at a briefing in the historic Harland & Wolff shipyard, a few hundred yards from the Bombardier plant.

 

“Boeing has significant defense contracts with us and still expects to win further contracts. Boeing wants and we want a long term partnership but that has to be two way.”

 

“Boeing is an important investor in the United Kingdom and an important employer in the United Kingdom but we would prefer this kind of issue to be settled on a negotiated basis,” Fallon said.

“This is not the kind of behavior that we expect from a long-term partner and I’ve made that very clear to Boeing,” Fallon told reporters.

Britain recently ordered the Boeing P-8 maritime surveillance plane and a new fleet of Apache attack helicopters. Its armed forces have deployed Chinook helicopters, the C-17 transport plane and the E-3 Sentry airborne early warning and command post.

Meanwhile, British Business Secretary Greg Clark said on Wednesday he was confident he would be able to have the U.S. anti-subsidy complaint against Bombardier dismissed.

“We’ve been working very closely with the Canadian government to make it clear that this is a complaint that is unjustified,” Clark told Sky TV.

 

“What needs to happen now by the trade commission is that they look to see whether there has been any detriment to Boeing,” he added.

 

“There hasn’t been because this aircraft does not compete with Boeing so we’re confident that we will be able to demonstrate that and have this case dismissed.”

Threatening language aside, the Gaurdian points out that Boeing has substantial leverage should the UK act to curtail its business relationship with the defense contractor. Boeing employs or supports more than 10,000 jobs in the UK; any tit-for-tat retaliation could affect them.

 

Even the labor party, which isn't politically dependent on Northern Ireland and thus has less of an incentive to care about the potential closure of a Bombardier plant there, has joined in the Boeing bashing. Labour leader Jeremy Corbyn has just told his party conference in Brighton that the tariffs imposed on Bombardier planes threaten “thousands of jobs”. He called on Prime Minister Theresa May to leverage her "special relationship" with the US to try and protect workers in Northern Ireland.

"Thousands of jobs are now at stake...a Prime minister is betting our economic future on a deregulated trade deal with the US might want to take a moment to explain how 220% tarifsf are going to boost our exports from this country."

Of course, once the ITC issues its ruling, the Trump administration will have the final say on tariffs. Will May's relationship with the president be enough to save Bombardier? Or will Trump side with Boeing and spin the tariffs as a bid to protect US workers - throwing red meat to his base in the process?

What do you think?

Comments

American Psycho BaBaBouy Wed, 09/27/2017 - 12:51 Permalink

"The ruling comes after Boeing said the Bombardier C-Series jet would not exist without hundreds of millions of dollars in launch funding from the governments of Canada and Britain..."Please remind me again about Solyndra, basically every state and movie production, ethanol, sugar, auto/financial bailout, etc, etc, ad nauseam

In reply to by BaBaBouy

Adullam American Psycho Wed, 09/27/2017 - 13:02 Permalink

Time for Canada to cease exporting raw materials and energy to the States. Not to mention, Bombardier imports a large percentage of end-product materials from the USA for their planes.Two can play at this game and the USA is running out of friends on the planet. You'd think they'd try to at least get along with their northern neighbour.The Canadian government needs to cancel it military orders from the States and buy from France or Britain and go on a serious program to produce its own planes. Maybe Bombardier can fill that void!

In reply to by American Psycho

Oldwood American Psycho Wed, 09/27/2017 - 13:10 Permalink

This is another cost of corruption. When a fight breaks out NOBODY has a leg to stand on.All this talk of free trade would also necessitate the elimination of all corporate income and property taxes as well as subsidies. By everyone, and to regulate it world rely on submission on a world court....the abandonment of sovereignty.  aka, the EU.Ain't never gonna happen.... unless of course the globalists get their way.

In reply to by American Psycho

Doubleguns BaBaBouy Wed, 09/27/2017 - 13:59 Permalink

This is another left over from the Obama administration and started by Boeing itself. Your spouting fake news blaming this on Trump. Maybe with a second reading you will comprehend it.  Boeing brought the complaint after Delta Air Lines agreed in April 2016 to purchase 75 C-Series jets, an order worth some $5 billion.

In reply to by BaBaBouy

falak pema Kayman Wed, 09/27/2017 - 17:20 Permalink

Well under Bush Snr/Clinton/Dubya the US had interest in working with Chindia.After 20 years of that the Duck suddenly changes course and rescinds on the WTO agreements and multilateral deals his predecessors signed in concrete.So when does a Potus act for the "interests" of his country and how is that "interest" defined ?The only "interest" that hegemons use is selfish ones. That has been made clear by this incredible about turn; motivated by the debt debacle of $.And now with their pants down to their ankles the WH is turning and twisting like the proverbial hurricane. Do hurricanes have vital interests?Do nations have a soul or is it an interest of every man for himself?Maybe there  are words missing in defining  the vital interest of nations : its the words "of the people"; the bedrock of government; its soul.For  near Four score years the US has lost the soul of government; little by little; all the while it plays at world hegemon.That is not sustainable. And don't say government is irrelevant; 'cos then we don't need a constitution.

In reply to by Kayman

sheikurbootie So Close Wed, 09/27/2017 - 12:47 Permalink

True statement.  A lot of what Trump says is sensational, baiting, but it's often times a negotiation tactic.  Everything he does is for a reason.  The guy has a big brain and can work plans quickly. Trump understands the problems.  We're being ripped off on trade.  It's obvious!  We have a massive trade deficit with nearly all of our trading "partners".  Fuck them, America first.  We really don't need to trade if we lose money!

In reply to by So Close

tion sheikurbootie Wed, 09/27/2017 - 15:14 Permalink

Fortunately a lot of the dirt cheap imports are garbage that we don't really need, but some of them we depend on.Are we hapless victims or have we had a hand in creating our circumstances?Americans can't just sit around expecting Daddy to fix all of their problems, we really need to be looking at how best to take this deficit issue into our own hands if we want to maintain a high standard of living, or we could be in for a world of pain.

In reply to by sheikurbootie

ArthurDaley-Ol… sheikurbootie Wed, 09/27/2017 - 16:01 Permalink

While I agree in principle you need to read "Triffin's Dilemma" .https://en.wikipedia.org/wiki/Triffin_dilemmaAs the reserve currency of the world the US Dollar has to be held by Central banks like Mexico Spain China Vietnam to have their local currency have any value at all. Yet are we living beyond our means? Sure & the rest of the world is at fault for letting Washington carry on this way for at least 5- 6 dedcades.. The US has run trade deficits since the 1960's with the exception of 3 years..

In reply to by sheikurbootie

Pliskin So Close Wed, 09/27/2017 - 13:07 Permalink

Just ignore him completely, he's an idiot!King of the tweets though?Oh, and before all the 'usual' crowd pipe up with '...if you don't love trump you must be sucking on hillary's piss flaps' no, I don't like either of them, or obama, bush, clinton, mccain, ryan (No need to capitalise these maggots names) i don't like any of them...and they ALL have the same thing in common!!Death to the lot of 'em!

In reply to by So Close

Max Cynical Wed, 09/27/2017 - 12:42 Permalink

I don't pretend to know all of the background issues regarding the implementation of this tariff...but a $2.5B EQUITY investment hardly seems anti competitive. How is this any different than the $10B+ VC "investment" in Uber or any other investment in a startup seeking a return?

ZeInfidel Wed, 09/27/2017 - 12:42 Permalink

It's about time...bombardier is a national disgrace that has been dependant on taxpayers funding it forever. execs make a fortune, a shitty product and because it's in quebec national politicians always fund it. let it fail. dicks.

NumNutt Wed, 09/27/2017 - 12:49 Permalink

Oh booohooo, Waaaaaa!!! We can't compete on a level playing field....yep sucks when you have to play by the same rules as everyone else doesn't it!

null Wed, 09/27/2017 - 12:51 Permalink

bring-it Canada, eh!
Trade war this is not ... that happens when actual trading partners are involved. A sycophant is never a partner but appears so, at a glance.

FringeImaginigs Wed, 09/27/2017 - 12:52 Permalink

Just get it over and done with. Would the Canadian government please just buy Bombardier for 1000 trillion dollars and then give away jets to whomever asks for them. Think of all the jobs that would be protected in Quebec, probably Trudeauboy's riding as a bonus. And the US can raise tarrifs to 1000 trillion percent to show they are protecting US business, and then let Boeing compete against the price of zero. Fuck, I must be an economist specializing in the airplane marekt to come up with this, or a layman who wonders if there ever was even one airplane sold in a free market. 

Zepper Wed, 09/27/2017 - 12:53 Permalink

No one likes the leader of Canada, not his people and not anybody else. I mean this incredibly stupid cunt was telling illegal aliens to go to his country... and ZH reported they are housing them in olympic stadiums.  Not to mention he snubbed president trump... I hope Trump puts tariffs on everything from Canada, bunch of ungrateful mooches. I hope Trump puts super tarriffs on shit they pass off as Canadian but are from China. Talk about a backdoor. If the people of Canada are smart they will dispose of this moron next election or empeach the stupid cunt... he is only going to cost people their livelihoods and international relationships. I cannot stress how stupid this cunt is.