Ottawa (AFP) – Canada-US trade relations took a nosedive Wednesday after the US Commerce Department announced it would impose steep anti-dumping duties on Canadian manufacturer Bombardier’s new CSeries jetliners.
The two neighbors are among the world’s closest allies and trading partners with more than half a trillion (US) dollars worth of goods traded annually.
But the US imposition of a 220 percent countervailing duty on a major Canadian manufacturer, following an investigation into state subsidies sparked by a Boeing complaint, was met with strong criticism.
Bombardier, unions representing Canadian aerospace workers, and both the Canadian and Quebec governments assailed the duties as “absurd,” “ridiculous,” “madness,” and an attempt by Boeing to “stifle competition.”
The duties — which are expected to be applied in 2018 when Delta Airlines is due to receive the first of 75 CSeries jetliners it ordered — would also negatively impact the ongoing renegotiation of the North American Free Trade Agreement (NAFTA), they warned, while calling for retaliatory measures.
“Obviously we’re disappointed by the decision and I will continue to fight hard for good Canadian jobs,” said Prime Minister Justin Trudeau, calling the US tariff “protectionist and warrantless.”
Ottawa — along with Britain, which is seeking to safeguard 4,200 Bombardier jobs in Northern Ireland — have threatened to boycott Boeing, which is hoping to sell 18 Super Hornet fighter jets to Canada and 50 Apache helicopters to Britain.
“Canada strongly disagrees with the anti-dumping and countervailing duty investigations into imports of Canadian large civil aircraft,” Canadian Foreign Minister Chrystia Freeland said overnight after the US announcement late Tuesday.
“This is clearly aimed at eliminating Bombardier’s CSeries aircraft from the US market,” she said.
Freeland warned that US parts suppliers for the CSeries aircraft that employ 23,000 Americans and their jobs could be at risk because of Boeing’s petition.
Her comments came hours before her previously scheduled meeting with US and Mexican counterparts for a third round of contentious continental free trade talks in Ottawa.
At the NAFTA talks, Canada is facing pressure to grant the US more access to its dairy market.
Separately, Canada is fighting with Washington for access to the US market for its softwood lumber, fearing a major hit to one of its top industries if it cannot secure a deal.
– ‘Boeing will regret this’ –
A fiery Quebec Premier Philippe Couillard, meanwhile, at a press conference called the Boeing-Bombardier row a low point in Canada-US relations.
“It’s not positive,” he said bluntly.
The premier said that “Boeing will regret this” and that “the American economy and American workers will suffer as a result of the ruling.”
Jerry Diaz, president of Canada’s largest union Unifor, which has consulted heavily with the Trudeau administration on the NAFTA negotiations, went further in saying the gloves were off.
“If they’re looking for a trade war, we ought not to continue to back down,” he said. “We have to be very strong and we need to tell them, enough is enough.”
“Ultimately, we’re going to have to retaliate.”
“This is an attack on our aerospace industry,” echoed Canada’s Trade Minister Francois-Philippe Champagne.
“This is about defending an industry which is providing more than 200,000 jobs in Canada and 300 suppliers across the country, so obviously we’ll be steadfast in our defense of Bombardier,” he said.
For Bombardier, the US announcement came as a double blow on the same day that news broke of a tie-up between German train-maker Siemens and France’s Alstom to create a rail juggernaut that would compete with Bombardier’s struggling rail division.
After years of losses, Bombardier has pegged its hopes for a turnaround on the CSeries — the first new aircraft design in the 100- to 150-seat category in more than 25 years.
It called the magnitude of the US duty “absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs.”
It accused Boeing of using a “skewed process to stifle competition.”
The union representing 7,000 Bombardier aerospace workers also denounced the tariff, accusing Boeing executives of “acting like bullies by manipulating American laws and taking advantage of Washington’s penchant for protectionism to close the US market to the CSeries.”
“If for the Americans NAFTA is dead, we should be told right away,” it added.
The Canadian Chamber of Commerce also came to Bombardier’s defense, saying the US decision “penalizes Bombardier for receiving the same government support that other manufacturers across the globe get from their own governments.”
As the third round of NAFTA renegotiations come to a close, he said, the ruling highlights the need for “a fair dispute settlement mechanism.”