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Canada Frustrated As US Announces More Tariffs On Bombardier

by Mike Godfrey, Tax-News.com, Washington

09 October 2017


The Canadian Government has said that it is "extremely disappointed and in complete disagreement with" the US Department of Commerce's decision to impose new anti-dumping duties on imports of Bombardier aircraft from Canada.

Canada's Foreign Affairs Minister, Chrystia Freeland, said: "These anti-dumping duties on Bombardier's C-Series aircraft unfairly target Canada's highly innovative aerospace sector and its more than 200,000 workers – and put at risk the almost 23,000 US jobs that depend on Bombardier and its suppliers."

On October 6 the US Department of Commerce announced its preliminary determination in an anti-dumping duty investigation into 100- to 150-seat large civil aircraft produced by Bombardier. The investigation was launched following the filing of a petition by Boeing in April, alleging one dumping margin.

Commerce said it based Bombardier's preliminary dumping margin on adverse facts available (AFA), because Bombardier failed to provide the information it requested. As AFA, Commerce applied the sole dumping margin calculated in the petition for Canadian exports of aircrafts, which was 79.82 percent.

The Bombardier aircraft subject to the investigation have not yet been imported into the US. If and when Bombardier exports the planes from Canada to the US, US Customs and Border Protection will be required to collect cash deposits from importers of the aircraft concerned, based on the preliminary 79.82 percent rate.

Freeland argued that Boeing is "manipulating the US trade remedy system to prevent Bombardier's new aircraft, the C Series, from entering the US market, despite Boeing's admission that it does not compete with the C Series."

The announcement follows a preliminary determination in a separate countervailing duty investigation into Bombardier aircraft, in which the Department of Commerce concluded that exporters had received countervailable subsidies of 219.63 percent.

Freeland said: "Given the baseless and absurdly high preliminary countervailing duties announced on September 26, today's news comes as no surprise. This is the second step in the US Department of Commerce's multi-step process."

She added that the Government will "vigorously defend the interests of the Canadian aerospace industry and our aerospace workers against irresponsible and protectionist trade measures."

The ruling was also criticized by the Canadian Chamber of Commerce, with the Chamber's President, Perrin Beatty, describing it as an "unwarranted penalty based on pure protectionism."

Beatty said: "Bombardier is being penalized for receiving the same government support that other aerospace sectors across the globe receive from their governments. Boeing's complaint and the Commerce Department's response constitute an abuse of process that will penalize not only Bombardier but also American workers and travellers and the American airline companies that will be forced to accept higher prices or inferior products."

He added: "This measure will cause slowdowns in innovation, investments, and job creation. It will have far-reaching impacts, not only in Canada, but also in the US, the United Kingdom, and Ireland. Basically, there are only losers in a trade war."

In defense of the measures, US Commerce Secretary Wilbur Ross said: "The United States is committed to free, fair, and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship. We will continue to verify the accuracy of this decision, while do[ing] everything in our power to stand up for American companies and their workers."

TAGS: tax | investment | Ireland | tariffs | anti-dumping | United Kingdom | travel and tourism | manufacturing | trade disputes | tax rates | Canada | United States | trade

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