Canada’s giant multinational aerospace and transportation company, Bombardier Inc., received a giant blow from the U.S. Department of Commerce on Tuesday.
In a preliminary decision, the department ruled that Bombardier had benefited from improper government subsidies and proposed a 220 per cent duty on Bombardier’s CSeries jets.
The decision follows an investigation sparked by a complaint from another aerospace giant, U.S.-based Boeing, after Bombardier secured a deal for the sale of up to 125 of its CS100s to Delta Air Lines in April 2016.
Boeing had asked for an 80 per cent duty.
The decision left both Bombardier and the Canadian government reeling.
The company called the ruling “absurd”
And, speaking prior to the ruling, Prime Minister Justin Trudeau voiced support for Bombardier and Canada’s aerospace industry and once again threatened to cut government ties with Boeing.
Talks between Canada and Boeing to purchase 18 Super Hornet fighter jets have already put on hold because of the Bombardier dispute.
“Certainly we won’t deal with a company that’s attacking us and attacking thousands of Canadian jobs,” Trudeau said outside the House of Commons.
In London, British Prime Minister Theresa May said she was “bitterly disappointed” by the ruling, adding that Britian will continue to work with Bombardier to protect jobs, including about 4,000 in Northern Ireland.
The U.S. financial penalties aren’t officially due until Bombardier delivers the first CS100 to Delta, expected in the spring.
There is also the possibility they could be dropped or refunded.
Tuesday’s ruling was the first of two the U.S. Commerce Department is scheduled to release on Bombardier.
A finding on whether Bombardier “dumped” CS100s into the U.S. by selling them below cost is due Oct. 4.
Meanwhile in Europe, Bombardier Transportation, the company’s rail business, suffered a setback Tuesday when rival railway manufacturers Siemens Mobility and Alstrom announced a merger.
With files from Canadian Press, Associated Press, CBC, Huffington Post, Toronto Star
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