Why Washington is Certain to Find Canada's Bombardier Guilty of Trade Abuses Next Week (excerpt)
Why Washington is Certain to Find Canada's Bombardier Guilty of Trade Abuses Next Week (excerpt)
(Source: Forbes Magazine; issued Sept 21, 2017)
Boeing's jetliners, such as this 787 Dreamliner (with All Nippon Airways livery), are all built in the U.S. and rely on a domestic supply chain of over 10,000 small and medium-size companies. Anytime a foreign plane maker like Bombardier takes business from Boeing, that destroys U.S. jobs.

Federal regulators are expected to issue a preliminary finding next week concerning Boeing's petition to slap hefty duties on U.S. imports of Montreal-based Bombardier's C Series jetliners. There isn't much doubt how the government will rule because this is an open-and-shut case. Bombardier has leveraged billions of dollars in government subsidies from Ottawa and the Quebec provincial government to engage in predatory pricing of its C Series, with the aim of taking market share (and jobs) from the U.S.-built Boeing 737.

As Boeing's hundred-page complaint lays out in excruciating detail, this is a classic case of dumping. The enforcement and compliance branch of the Commerce Department's International Trade Administration says that dumping occurs "when a foreign producer sells a product in the United States at a price that is below that producer's sales price in the country of origin ('home market'), or at a price that is lower than the cost of production." In Bombardier's case, both definitions of dumping apply.

Boeing's petition requests that countervailing and antidumping duties be applied that increase the price tag of C Series planes sold in the U.S. by the amount that subsidies enabled Bombardier to reduce it. That would put the two companies back on a level playing field where trade abuses are not giving one side an unfair advantage. This isn't just a matter of U.S. law:

The World Trade Organization prohibits dumping when it does damage to industries in an importing country, and that's what would occur if the C Series were priced below cost for U.S. buyers. (end of excerpt)

Click here for the full story, on the Forbes magazine website.


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