Trade Body in U.S. Backs Bombardier Versus Boeing

On Friday, a trade commission in the U.S. handed a surprising victory to Canada-based Bombardier Inc. against U.S. based Boeing, Co. in its ruling that allows the company in Canada to sell its most recent jets to airlines in the U.S. without any heavy duties, sending shares of Bombardier up more than 15%.

The United States International Trade Commission made an unanimous decision that becomes just the most recent twist in the trade relations between the U.S. and Canada that have become complicated through disputes dealing with tariffs on lumber from Canada and milk from the U.S. and the desire by U.S. President Donald Trump to completely renegotiate or abandon NAFTA, the North American Free Trade Agreement.

The president, who did not speak about the dispute, took his message of “America First” to the elite of the world Friday, when he told a summit that the U.S. would not turn a blind eye any longer to what he called unfair trade practices.

ITC commissioners voted 4-0 Bombardier’s prices were not harmful to Boeing and threw aside a recommendation by the U.S. Commerce Department to place a duty of close to 300% on sales of the 110-to-130 seat jets in its CSeries for a period of five years. No reason by the commissioners was given over why they voted against the duty.

U.S. Secretary of Commerce Wilbur Ross said through a prepared statement that the finding by the commission shows how robust the system of checks and balances in the country is.

The decision is going to help Bombardier sell its CSeries in the U.S. through removing uncertainty during a time when its rival from Brazil Embraer is bringing a new jet into the market, said a source who is familiar with the thinking of the plane and train maker in Canada.

The ITC was expected to take the side of Boeing, which alleged it has been forced to lower it price of its narrow body 737’s to compete with Bombardier, which it said had used subsidies from the government to dump the jet series during the sale in 2016 of 75 jets a prices it called absurdly low to Delta.

Bombardier has said that the trade case was self-serving, when Boeing on December 21 revealed that it had been talking with Embraer about a potential combination. Boeing has denied that the trade case had been motivated by talks with Embraer.

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