US Commerce Department assesses duties on aircraft from Canada

25 January 2018 11:00am
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First published by MLex 20 December 2017. By Adam Sigal.

Aircraft from Canada should be subject to antidumping and antisubsidy duties, the US Department of Commerce said Tuesday.

Commerce published the final results of its investigation into imports of 100- to 150-seat large civil aircraft from Canada, setting margins on future imports of planes and parts. The results were announced one day after originally scheduled and the agency has not commented on the delay.

The agency investigated a proposed sale by Bombardier, the sole manufacturer of planes in Canada, of its C Series aircraft to Delta estimated to be worth $5 billion.

The company was assigned an antidumping rate of 79.82 percent, the rate alleged in Boeing's original petition seeking duties. Commerce said it used Boeing’s rate instead making its own calculation because Bombardier failed to provide information that investigators had requested.

Bombardier was assigned an antisubsidy rate of 212.82 percent based on subsidies provided by Canada, the province of Quebec and the UK. The rate is slightly lower than Commerce’s preliminary finding of 219.63 percent, but the change is unlikely to be significant to Bombardier.

The agency also sided with Boeing on the scope of the investigation, saying that the aircraft will be subject to duties “whether they enter the United States fully or partially assembled.” The phrasing will cause difficulty for an announced plan by Bombardier and Airbus to assemble the planes for US customers at a manufacturing facility in Alabama.

Boeing hailed the ruling as vindication.

“Today’s decision validates Boeing’s complaints regarding Bombardier’s pricing in the United States, pricing that has harmed our workforce and U.S. industry,” the company said in a statement.

Chrystia Freeland, the Canadian Minister of Foreign Affairs, criticized the findings as “punitive” because they were so large. Freeland also added that, “It is beyond all reason that Boeing could be threatened with injury in a market segment it exited over a decade ago.” The Department of Commerce does not rule on threat of injury, and the US International Trade Commission is scheduled to issue its final injury ruling in January.

Bombardier’s reaction to the ruling also focused on the threat posed by the imports, calling the ruling, divorced from the reality of the plan for the Alabama plant.

All parties, including Bombardier and Canada, agreed in briefs to the Commerce department that its investigation should not include an evaluation of the effects of plans to assemble the aircraft in an Airbus owned facility in Alabama.