ITC explains why Bombardier won trade dispute against Boeing
The International Trade Commission (ITC), a U.S. trade agency, issued a reasoning explaining its January 26, 2018, ruling, which rejected Boeing’s claim against Bombardier in a 100 - to 150 seat large civil aircraft from Canada antidumping investigation.
On January 26, 2018, in a vote 4-0, the ITC ruled that “a U.S. industry is not materially injured or threatened with material injury by reason of imports of 100- to 150-seat large civil aircraft from Canada that the U.S. Department of Commerce (Commerce) has determined are subsidized and sold at less than fair value”.
Now, the trade agency explained that Boeing did not lose any sales or revenues to Bombardier, as the U.S. plane maker’s smallest aircraft – the 737 MAX 7 - does not compete against the Canadian 100 - to 150 seat C Series. “The higher standard seating capacity of the 737-700 and 737 MAX 7 limits competition between those models and the CS100 for some purchasers,” is noted in the ruling, according to Reuters.
Boeing launched a trade dispute against Bombardier in 2017, alleging that the Canadian government is illegally subsidizing C Series commercial airliner program and that the planes are being sold in the U.S. at “absurdly low” prices.
Boeing backed this claim by referring to Delta Airlines (DAL) and Bombardier deal for C Series planes. At the end of 2016, Delta Airlines (DAL) canceled a deal with Boeing for the purchase of 18 Boeing 787-8 Dreamliners. The amount of the canceled transaction is estimated at $4 billion. At the same time, in April 2016, Delta Airlines (DAL) entered into an agreement with Bombardier to purchase 75 CS100 aircraft valued at $5.6 billion.
Following the accusations, the U.S. government imposed 300% trade duties on C Series planes, but the ITC ruling determined that the tax obligation will not come into force.
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