Boeing vs. Bombardier: Canada Cautions The U.S.

On Thursday 5/18/17, the Canadian government warned the United States that they may cancel a $2 billion order for 18 Super Hornet fighter jets from Boeing. This announcement came just after the Trump administration took the first official step to renegotiate NAFTA. However, Canada’s government cited the cause for the cancellation will be directly related to the U.S. Department of Commerce anti-dumping investigations against Canadian plane maker, Bombardier.

Foreign Minister Chrystia Freeland issued this statement, “Canada is reviewing current military procurement that relate to Boeing.” http://bit.ly/2rAlwh2

Boeing is calling for duties to be imposed on Bombardier’s new CSeries passenger aircraft. The American aerospace manufacturer argued at a hearing in Washington that the Bombardier received government subsidies that give it an unfair international advantage. Freeland responded to Boeing’s claims by saying the allegations are, “clearly aimed at blocking Bombardier’s new aircraft, the CSeries aircraft, from entering the U.S. market.” http://nydn.us/2qBRdcw

Tensions are on the rise between the U.S. and Canada in regard to trade. This latest warning by the Canadian government only solidifies this fact. But the U.S. isn’t the only country worried about Canadian subsidies impacting their industry. Brazil launched a complaint to the World Trade Organization over Bombardiers extremely competitive prices. The Sao Paolo-based plane manufacturer, Embraer is a direct competitor of Bombardier and are worried what the CSeries will mean for their own business.

Though the Quebec government invested $1 billion in exchange for a 49.5% stake in the CSeries and Canada’s federal government provided a $275 million loan to Bombardier, Boeing alleges that this was only a portion of the total subsidies handed to the plane manufacturer. Boeing explained to the U.S. Commerce Department and the U.S. International Trade Commision that Bombardier received more than $3 billion in subsidies so far which allowed them to set the price of the CSeries well below the fair market value.

Manufacturing Talk Radio has been keeping a close eye on this story since it broke back on April 28th. To find out more about the origins of this dispute between Boeing and Bombardier, come take a look at the original story. Don’t forget to keep checking back on MFGTalkRadio.com for the latest developments and trends surrounding the manufacturing industry in the U.S. and abroad.

Sources:
http://www.manufacturing.net/news/2017/05/canada-warns-it-may-cancel-us-jet-buy-over-bombardier-probe-0
http://www.nydailynews.com/newswires/news/business/canada-warns-cancel-jet-buy-bombardier-probe-article-1.3177595
http://abcnews.go.com/International/wireStory/canada-warns-cancel-us-jet-buy-bombardier-probe-47499787
http://www.cnbc.com/2017/02/09/canada-warns-trump-administration-over-talk-of-us-tariffs.html