US launches investigation into Canadian aircraft imports

US launches investigation into Canadian aircraft imports

A Bombardier C Series aircraft. (REUTERS/Edgar Su/Files)

WASHINGTON: The Trump administration on Thursday (May 18) launched an investigation into planned imports of Canadian aircraft, following a complaint last month by US aviation giant Boeing that the planes receive unfair subsidies.

The anti-dumping investigation will look into charges that Canada's Bombardier receives subsidies of nearly 80 per cent, and could lead the US Commerce Department to impose equivalent punitive import duties.

The preliminary ruling on the 100- to 150-seat planes is due by Jun 12.

"The US market is the most open in the world but we must take action if our rules are being broken," Commerce Secretary Wilbur Ross said in a statement.

Canadian Foreign Affairs Minister Chrystia Freeland said officials "strongly disagree" with the investigation, insisting it was a tactic by Boeing to block the new aircraft. She also hinted that Ottawa might take action against the US company.

"Canada is reviewing current military procurement that relates to Boeing," Freeland said in a statement. "Our government will defend the interests of Bombardier, the Canadian aerospace industry, and our aerospace workers."

The latest trade dispute came as the Trump administration announced it had begun the process of renegotiating the North American Free Trade Agreement, a 1993 trade pact which binds the United States, Canada and Mexico but which President Donald Trump has branded a "disaster."

The new investigation also followed Washington's decision to slap tariffs on Canadian imports of softwood lumber. Since Trump took office in January, an aggressive stance on trade has set relations with America's neighbors on edge.

Boeing filed a complaint last month charging Bombardier was marketing its CSeries passenger jets in the United States for less than it costs to produce them, which could undercut sales of Boeing 737 passenger jets.

Boeing called on the Commerce Department to examine Bombardier's "illegal and unfair" practices.

The Canadian aircraft subject to the investigations have not yet been imported. But the Commerce Department cited an April 2016 statement announcing the pending sale of Bombardier aircraft to a Delta Air Lines in an order valued at US$5.6 billion.

Bombardier said last month it worked to ensure compliance with the laws of countries where it operates and spent about US$3 billion annually with American suppliers.

Source: AFP/de