U.S. Department of Commerce issues affirmative preliminary antidumping duty determination on imports of 100- to 150-seat large civil aircraft from Canada
Commerce is currently scheduled to announce its final AD determination in this investigation on December 19, 2017.
If the Commerce Department makes an affirmative final determination of dumping and the U.S. International Trade Commission (ITC) makes an affirmative final injury determination, Commerce will issue an AD order. If the Commerce Department makes a negative final determination of dumping or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued.
Click HERE for a fact sheet on today’s decision.
The U.S. Department of Commerce’s Enforcement and Compliance unit within the International Trade Administration is responsible for vigorously enforcing U.S. trade laws and does so through an impartial, transparent process that abides by international rules and is based solely on factual evidence.
Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties.
In the fiscal year 2016, the United States collected $1.5 billion in duties on $14 billion of imported goods found to be underpriced or subsidized by foreign governments.
Oct. 06, 2017
It is clear that this duty is aimed at the Bombardier C Series aircraft. Boeing claims that it loses markets to the C Series, although it does not manufacture any aircraft of that class.
The 79.82 percent anti-dumping duty comes in addition to the preliminary duty of 220 percent already imposed in the first round of discussions.
We have published elsewhere the reaction of Bombardier on the preliminary duty.
Here is their reaction to the new decision:
“We strongly disagree with the Commerce Department’s preliminary decision. It represents an egregious overreach and misapplication of the U.S. trade laws in an apparent attempt to block the C Series aircraft from entering the U.S. market, irrespective of the negative impacts to the U.S. aerospace industry, U.S. jobs, U.S. airlines, and the U.S. flying public.
The Commerce Department’s approach throughout this investigation has completely ignored aerospace industry realities. Boeing’s own program cost accounting practices – selling aircraft below production costs for years after launching a program – would fail under Commerce’s approach. This hypocrisy is appalling, and it should be deeply troubling to any importer of large, complex, and highly engineered products.
Commercial aircraft programs require billions in initial investment and years to provide a return on that investment. By limiting its antidumping investigation to a short 12-month period at the very beginning of the C Series program, Commerce has taken a path that inevitably would result in a deeply distorted finding.
We remain confident that, at the end of the processes, the U.S. International Trade Commission will reach the right conclusion, which is that the C Series benefits the U.S. aerospace industry and Boeing suffered no injury. There is wide consensus within the industry on this matter, and a growing chorus of voices, including airlines, consumer groups, trade experts, and many others that have come forward to express grave concerns with Boeing’s attempt to force U.S. airlines to buy less efficient planes with configurations they do not want and economics that do not deliver value.
The U.S. government should reject Boeing’s attempt to tilt the playing field unfairly in its favour and to impose an indirect tax on the flying public through unjustified import tariffs.
Commerce’s statement that Bombardier is not cooperating with the investigation is a disingenuous attempt to distract from the agency’s misguided focus on hypothetical production costs and sales prices for aircraft that will be imported into the United States far in the future.
As we have explained repeatedly to the Department, Bombardier cannot provide the production costs for the Delta aircraft for a very simple reason; they have not yet been produced. Commerce’s attempt to create future costs and sales prices by looking at aircraft not imported into the United States is inappropriate and inconsistent with the agency’s past practices. This departure from past precedent and disregard of well-known industry practices is an apparent attempt to deprive U.S. airlines from enjoying the benefits of the C Series, even though Boeing abandoned the segment of the market served by the C Series more than a decade ago.
This action also puts thousands of high-technology U.S. jobs at risk given the C Series’ significant U.S. content. More than half of each aircraft’s content, including its engines and major systems, is sourced from U.S. suppliers. Going forward, the C Series program will generate more than $30 billion in business for U.S. suppliers and support more than 22,700 jobs in the United States.”