U.S. to Slap Big Tariff on New Jetliner From Canada's Bombardier -- 2d Update
By Doug Cameron and Jacquie McNish
Bombardier Inc. received a double blow on Tuesday when a U.S. trade body slapped sanctions on its new jetliner and a long-sought deal evaporated with its main transportation partners.
U.S. trade officials said they plan to slap a large tariff on sales of a new Bombardier jetliner to U.S. airlines, inflaming a simmering trade spat with Canada that has attracted opposition from other countries.
In addition, Bombardier was left on the sidelines when Germany's Siemens AG announced that it is forming an alliance with French train maker Alstom SA to create a train business with $18 billion of annual sales. The combination creates the world's second-largest train maker. Bombardier had been in discussions with Siemens since early this year to form a similar partnership, but talks broke down in August. (See article on page B5.)
The International Trade Commission ruled in favor of a complaint from Boeing Co. and said it would add a 220% tariff to the cost of the new CSeries jet. The jet's sale to Delta Air Lines Inc. last year prompted a complaint from Boeing. A final decision on any duty is expected next year.
The U.S. agency's decision was widely ridiculed by aerospace-industry experts, who said cutting prices to boost sales was a common practice.
"The Commerce Department will instruct U.S. Customs and Border Protection to collect cash deposits from importers of 100- to 150-seat large civil aircraft based on these preliminary rates," the department said in a statement.
Delta, whose 75-jet order for the CSeries triggered the case, said it was confident the U.S. would take no action against it.
"Boeing has no American-made product to offer because it canceled production of its only aircraft in this size range, the 717, more than 10 years ago," it said in a statement.