Commerce lands duties on small Canadian-built aircraft

In a rather unusual move, the U.S. Commerce Department proceeded with recommending antidumping and countervailing duties for Canadian-built 100- to 150-seat commercial aircraft, despite the fact that they have yet to be delivered to Delta Air Lines.    The Commerce Department on Wednesday proceeded with announcing its recommended antidumping and countervailing duties to be imposed on 100- to 150-seat commercial aircraft from Canada, the department said in a statement.
   The antidumping and countervailing duty investigation, which was petitioned by Boeing earlier this year, was both unusual and controversial since the Canadian aircraft have not yet been imported into the United States. Rather the Commerce investigations centered on an April 2016 announcement that Canada’s Bombardier will supply its C-Series 100- to 150-seat planes to Atlanta-based Delta Air Lines in a deal valued in excess of $5 billion.
   Boeing alleges in its petition to both Commerce and the International Trade Commission (ITC) that these planes will be dumped on the U.S. market at less than fair value and the Canadian government provides Bombardier with unfair, export performance-based subsidies.
   In its investigation, Commerce based Bombardier’s final dumping margin –72.82 percent—on “adverse facts available,” because the Canadian company failed to provide information requested by department in its antidumping questionnaire. Using reported information from the governments of Canada, Quebec, and the United Kingdom and Bombardier’s reported information, Commerce calculated a final subsidy rate of 212.39 percent for Bombardier.
   As a result of these decisions, Commerce will instruct Customs and Border Protection to collect cash deposits from importers of 100- to 150-seat large civil aircraft based on the final rates. 
   “This decision is based on a full and unbiased review of the facts in an open and transparent process.” said Commerce Secretary Wilbur Ross.
   “These investigations have already established beyond question that Bombardier has taken billions of dollars in illegal government subsidies to prop up its C Series program,” Boeing said in a separate statement. “The C Series would not even exist at this point but for those subsidies.”
   “The investigations have also left no doubt Bombardier used these government funds to dump aircraft into the U.S. market at absurdly low prices, millions below their cost of production and millions below the price of the same aircraft in Canada. Bombardier’s conduct is flatly inconsistent with U.S. trade law, and it has caused severe harm to Boeing, its employees, and its suppliers,” the U.S. aircraft manufacturer added.
   Boeing, however, has not manufactured civilian planes in the smaller sizes produced by Bombardier in a number of years. 
   “The high final countervailing and anti-dumping duty rates announced by the U.S. Department of Commerce on imports of Bombardier’s C Series aircraft are highly punitive to aerospace workers on both sides of the border,” Canada’s Foreign Affairs Minister Chrystia Freeland said Wednesday.
   “The government of Canada is deeply troubled by the protectionist nature of Boeing’s allegations, which seek to advance its market dominance by excluding Bombardier’s C-Series aircraft from the U.S. market. It is beyond all reason that Boeing could be threatened with injury in a market segment it exited over a decade ago,” she said.
   Bombardier, the Canadian government, and Boeing agreed that a recently proposed transaction between Bombardier and Airbus to build the 100- and 150-seat aircraft does not impact these antidumping and countervailing duty investigations. The proposed transaction has yet to be finalized.
   The ITC, which held a public hearing earlier this week related to the investigations, is scheduled to make its final determinations by Feb. 1, 2018. If the ITC makes affirmative final determinations that imports of Canadian aircraft harm the domestic industry, Commerce will issue antidumping and countervailing duty orders. If the ITC makes negative determinations of injury, the investigations will end.