The Unites States Commerce Department has suggested nearly 300% in anti-subsidy duties against Canadian aircraft manufacturer Bombardier’s CSeries commercial jets.
The recommendation comes after Boeing raised a complaint that Bombardier was being subsidized illegally and unfairly by the Canadian government.
The aircraft, which is listed at around $80 million each, is usually sold at deep discount to carriers. Delta Air Lines, the second biggest airline by passenger traffic in the U.S., has an order in for 75 of the CSeries jets.
Boeing complained that Delta had gotten the planes for as little as $20 million each because of Canadian subsidies, whereas the same aircraft sells for $33 million in Canada.
The U.S. Commerce Department’s suggested duties would effectively triple the cost of each plane for Bombardier in the United States.
The next stage is for the International Trade Commission to rule in favor of Boeing, which should happen sometime in early 2018. And if the past is anything to go by, that’s more than likely to happen.
But Bombardier isn’t sitting still. Criticizing the Commerce Department’s decision, the company highlighted the fact that it plans to partner with Airbus to start assembling the CSeries jets in Mobile, Alabama, which would make it a local product.
In a statement following the Commerce Department recommendation, Bombardier said:
“Unfortunately, the Commerce Department decision is divorced from this reality and ignores long- standing business practices in the aerospace industry, including launch pricing and the financing of multibillion dollar aircraft programs.”
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