Boeing shares rose Monday, as did Bombardier shares, as the two plane makers set out their defence to the US International Trade Commission (ITC) in the trade row between the two firms. Boeing alleges that Bombardier has been in receipt of illegal state subsidies which has harmed its business.
Bombardier shares ended the Canadian Monday trading session 0.97% higher at CAD3.10 after a quiet trading day for the company. Boeing shares, meanwhile, ended 0.75% higher at €296.14 at the close of US trading business Monday.
Bombardier facing 300% import tariff
The row between the two firms stems from a 2016 deal where Bombardier sold 75 of its C-Series planes to Delta. Boeing alleges the final sale price of $20m per plane was a huge discount on the $33 million price, charged in Canada.
Bombardier was able to charge a below cost price in the US, Boeing says, due to the huge subsidies it received – illegally – from the Canadian government.
So far, the US ITC has upheld Boeing’s complaint and an 300% import tariff is in place on any sales of Bombardier C-Series planes in the US. This latest hearing, however, could change that outcome.
But, if the high tariff charge is enforced, it will effectively close the US market to Bombardier’s C-Series planes. That’s despite a new deal between Bombardier and Airbus, which is bringing more of the construction of the C-Series to the US – creating many jobs for Americans.
Monday’s comments from Boeing and Bombardier underscored the depth of the disagreement between the two rivals.
Bombardier said Boeing had nothing to fear from Bombardier’s new C-Series as it was making money “hand over fist” on the Boeing 737.
“With a backlog of 737 orders years into the future, there are no signs of difficulty on the horizon," said Peter Lichtenbaum, Bombardier’s representative at the hearing.
Boeing, meanwhile, said it had already proved beyond doubt that Bombardier had received billion in illegal Government subsidies.
“The C-Series would not even exist at this point but for those subsidies,” Boeing said.
The Canadian Government, however, disputes Boeing’s claims.
“Boeing's assertion that future imports from Canada threaten to cause material injury is necessarily based on just the type of speculation and conjecture that is prohibited under both US and international law,” said Canada's ambassador to the US, David MacNaughton.