Trade commission rules against Boeing in case against Bombardier

The U.S. International Trade Commission (ITC) on Friday unexpectedly ruled against Boeing in a trade case the Trump administration brought against Canadian rival Bombardier over C-Series commercial jets. 

The commission voted 4-0 in favor of Bombardier.

The Commerce Department sought to slap tariffs of 292 percent on orders of C-Series planes, a 110-seat aircraft bought by Delta Airlines in 2016. The tariffs will not be imposed. 

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“Today’s decision is a victory for innovation, competition, and the rule of law,” Bombardier said in a statement after the vote.

Chicago-based Boeing first brought the case to the Commerce Department last year, arguing Canadian and British governments were illegally subsidizing the C-Series’s costs.

This allowed Bombardier to sell the planes to Delta at unfairly low prices, which was harmful to Boeing’s business, according to the aerospace giant.

Bombardier argued that Boeing isn’t threatened by the sales of the C-Series because it doesn’t sell a comparable aircraft to offer Delta, which ordered 75 planes to update its fleet.

Boeing said in a statement that it was “disappointed” by the decision and “will review the Commission’s more detailed opinions in full as they are released in the coming days.”

The dispute has stressed trade agreements between Canada and the United States. Canada last month called off a planned $5.15 billion buy of 18 Boeing Super Hornet fighter jets, citing the dispute with the defense contractor.

Canadian and United Kingdom officials also warned Boeing that it could lose defense contracts in the countries over the complaint. 

The case, among others leveled against Canada, by the United States lately, have inflamed tensions between the two countries in ongoing negotiations to update the 24-year-old North American Free Trade Agreement.

Earlier this month, Canada filed a wide-ranging trade case at the World Trade Organization against the United States over those plans to slap anti-dumping and countervailing duties on certain products.

The case came mostly in response to steep tariffs the Trump administration has levied on Canada’s softwood lumber industry, which is vital to U.S. home building.

Trade negotiators from Mexico, Canada and the United States are in Montreal this week meeting on how to update the 1990s-era NAFTA deal. 

“We are very pleased with today’s vote by the ITC, which confirms Canada’s position that Boeing is not commercially threatened by Bombardier’s C Series aircraft,” Canada’s minister of foreign affairs Chrystia Freeland said in a statement.

“Moreover, Canada-United States trade is important to the prosperity of both our countries. This decision will support well-paying middle-class jobs on both sides of the border,” Freeland said. 

The United Kingdom called the decision “excellent news.”

“The decision by the International Trade Commission confirms what the UK and Canadian Governments working hand in hand has [sic] maintained from the outset, that this case is unjustified,” said U.K. Business Secretary Greg Clark in a statement.

“We are pleased that the ITC have now recognized this,” 

Bombardier has a plant in East Belfast, Northern Ireland, which employs about 4,000 people.

Vicki Needham contributed. 

-Updated 4:43 p.m. and 5:15 p.m.