British Prime Minister Theresa May has petitioned US President Donald Trump over a threat to jobs at the Bombardier plant in Belfast because of a trade dispute with the Boeing company.
In 2016 the Canadian firm Bombardier won an order to supply up to 125 C-Series passenger jets to US airline Delta. The wings for the C-Series, however, are made in Belfast. But now rival aircraft firm, Boeing, has complained to the US authorities that the deal was unfairly subsidized by the Canadian government and that Bombardier engaged in “price dumping” by agreeing to sell 75 of their planes for almost $14m (£10.6m) below their cost price.
This, in effect, shows favoritism for Canadian based Bombardier by Canadian authorities. Boeing has also complained about a UK government loan made to the Bombardier plant in Belfast. This is not unlike what Tesla does here in the US, where Tax Payers get stuck paying for part of the final product in order for the product to be competitively priced.
The US Department of Commerce is due to make a ruling on this case later this month. If they rule for Boeing then a stiff tariff will be slapped on Bombardier products and its imports, which will result in catastrophic losses for the company.
May Asked Trump to Intervene in Boeing-Bombardier Dispute
U.K. Prime Minister Theresa May asked U.S. President Donald Trump to intervene in a court dispute between Boeing Co. and Canada’s Bombardier Inc. over state aid, her office said.
The request, made in a call with the president on Sept. 5, came as her government seeks to protect jobs at a Bombardier plant in Belfast, Northern Ireland. May’s government relies on votes from Northern Ireland’s Democratic Unionist Party to pass legislation through the House of Commons.
May is expected to discuss Boeing and other issues with Canadian Prime Minister Justin Trudeau during a visit to Ottawa on Sept. 18, a Canadian government official said, speaking on condition they not be identified since a formal announcement has not been made. May raised the case with Trump after the intervention of DUP leader Arlene Foster, the Times of London newspaper reported, without saying where it got the information.
See here why May cannot afford to lose Bombardier jobs post-Brexit
“Our priority is to encourage Boeing to drop its case and seek a negotiated settlement with Bombardier,” the U.K. Department for Business said in an emailed statement. “This is a commercial matter but the U.K. government is working tirelessly to safeguard Bombardier’s operations and its highly skilled workers in Belfast.”
Boeing is pressing the U.S. International Trade Commission to impose tariffs against its Canadian competitor over sales of its C Series jets at “absurdly low prices” while receiving unfair government support, including a 113 million-pound ($149 million) loan from the British government. The commission ruled in June that Boeing may have been harmed by sales of C Series aircraft at less than fair value.
‘Level Playing Field’
Boeing said in a statement that it is seeking to restore “a level playing field” in the U.S. single-aisle airplane market. “Boeing had to take action as subsidized competition has hurt us now and will continue to hurt us for years to come, and we could not stand by given this clear case of illegal dumping,” the company said.
“This is the normal course of action for addressing instances where a competitor is selling into the U.S. market below cost, and we will let the process play out,” it added. “We believe that global trade only works if everyone plays by the same rules of the road, and that’s a principle that ultimately creates the greatest value for Canada, the United Kingdom, the United States and our aerospace industry.”
Bombardier has criticized Boeing’s complaint, calling it an “unfounded assault” on airlines. “We are very confident the U.K. government understands what is at stake and will take the actions necessary to respond to this direct attack on its aerospace industry,” spokesman Bryan Tucker said in a written statement Tuesday.
Alongside May’s intervention, Business Secretary Greg Clark traveled to Chicago to meet with Boeing executives to try to find a solution to the dispute and safeguard about 4,500 jobs in Bombardier’s Northern Ireland unit, his office said.
Talks Break Off
David MacNaughton, Canada’s Ambassador to Washington, told reporters Tuesday that Boeing had walked away from talks with his government over the issue and that he has now raised it with U.S. Commerce Secretary Wilbur Ross.
“For whatever reason they decided they weren’t going to continue to have discussions,” MacNaughton said, adding Boeing’s complaint stems from the sale of planes to Delta Air Lines Inc., a purchase that he said Boeing was not even competing for.
Bombardier’s C Series plane “does not compete against any Boeing aircraft on the Delta sale,” MacNaughton said, adding: “What we’re trying to understand is what they’re objecting to.”
Anyone with an IQ of over 70, or is not a Liberal, can clearly see why British Prime Minister Theresa May has called President Trump to help in this matter. But should he?
Trump is a great negotiator, we all know this very well, but he has also made it very clear that America comes first now. That also includes Boeing. If Boeing was indeed mistreated by a rigged system, or by the way the bid system was conducted and how Canada helped Bombardier get the contract, then maybe he should just stay out of it and let the US Department of Commerce deal with this mess. This would be my advice. But on the flip side, Great Britain is one of our most staunch allies and closest friends.
Please share if you agree President Trump should stay out of this mess….
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