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US International Trade Commission rules for Boeing not Bombardier
THE US International Trade Commission (ITC) has ruled that Montreal's Bombardier planemaker may well have damaged Boeing commercial jet business by charging less than fair value because of Canadian government subsidies.
Boeing accuses Bombardier of selling its C Series jets in the US at "absurdly low" prices, while benefiting from unfair government subsidies in Canada, reported Bloomberg.
The ITC ruling allows Boeing to press for tariffs against its Canadian competitor.
The trade court ruled there's reasonable indication that Boeing's business may have been hurt or threatened by Bombardier sales in the US of its C Series jets.
The Commerce Department is investigating separately whether to impose duties on the Bombardier planes. A negative ruling by the ITC would have ended the two investigations.
Before the US imposes any duties, the ITC would still have to issue a final ruling on the question of how Boeing's business was affected.
"The ITC and WTO ruling are scaring people but I don't buy that," said Nicholas Heymann, an analyst with William Blair & Co. "Ultimately it's not going to prohibit the commercial success of the C Series, as I see it."
Bombardier spokesman Mike Nadolski said in an email that the company had expected the preliminary ITC decision given "the very low bar for Boeing in this first step of the process" and that a more detailed review will show Boeing's claims are baseless.
Tariffs could hurt Bombardier's efforts to win customers for its largest-ever jetliner. The last major firm order for the plane - Delta Air Lines' for at least 75 jets - dates to April of last year.
The Canadian government earlier this year pledged C$372.5 million (US$275 million) to Bombardier to finance two jet programmes, including the C Series. Last year, the Quebec provincial government gave C$1 billion to the jetliner project.
Boeing accuses Bombardier of selling its C Series jets in the US at "absurdly low" prices, while benefiting from unfair government subsidies in Canada, reported Bloomberg.
The ITC ruling allows Boeing to press for tariffs against its Canadian competitor.
The trade court ruled there's reasonable indication that Boeing's business may have been hurt or threatened by Bombardier sales in the US of its C Series jets.
The Commerce Department is investigating separately whether to impose duties on the Bombardier planes. A negative ruling by the ITC would have ended the two investigations.
Before the US imposes any duties, the ITC would still have to issue a final ruling on the question of how Boeing's business was affected.
"The ITC and WTO ruling are scaring people but I don't buy that," said Nicholas Heymann, an analyst with William Blair & Co. "Ultimately it's not going to prohibit the commercial success of the C Series, as I see it."
Bombardier spokesman Mike Nadolski said in an email that the company had expected the preliminary ITC decision given "the very low bar for Boeing in this first step of the process" and that a more detailed review will show Boeing's claims are baseless.
Tariffs could hurt Bombardier's efforts to win customers for its largest-ever jetliner. The last major firm order for the plane - Delta Air Lines' for at least 75 jets - dates to April of last year.
The Canadian government earlier this year pledged C$372.5 million (US$275 million) to Bombardier to finance two jet programmes, including the C Series. Last year, the Quebec provincial government gave C$1 billion to the jetliner project.
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