The United States’ Hefty Tariff on Canadian Bombardier Jets Creates Backlash
The United States imposed new tariffs on Canadian Bombardier jets on September 27, fueling trade tensions between the two nations. The U.S. Department of Commerce announced this decision after American jet maker Boeing brought a claim against the Bombardier company. Bombardier, Canada, and the U.K. have reacted negatively to the announcement, heightening trade tensions. Boeing claimed that Bombardier had received unfair government subsidies, decreasing the prices of Bombardier aircraft. If the U.S. is unable to compete with these lower prices, the industry faces production cuts and unemployment. By ruling in Boeing’s favor, the Department of Commerce slapped a 220 percent tariff on the Bombardier jets. In releasing the decision, U.S. Commerce Secretary Wilbur Ross said, “Even our closest allies must play by the rules.”
The move has been poorly received. In a statement on September 26, Bombardier called the magnitude of the tariff “absurd.” The tariff could inflict serious detriments on sales and employment at Bombardier. Canadian Minister of Foreign Affairs Chrystia Freeland declared that Canada “strongly disagrees” with the ruling, adding, “[The government] will always defend Canadian companies and Canadian workers against unfair and costly protectionism.” Prime Minister Justin Trudeau threatened to retaliate by discarding a planned Canadian purchase of Boeing military aircraft, saying, “We won’t do business with a company that’s busy trying to sue us and put our aerospace workers out of business.”
This surge in trade tensions is untimely, as the U.S. and Canada are at odds over the future of the North American Free Trade Agreement (NAFTA). This new tariff, along with its potential spillover effects and punitive retaliations, heightens trade tensions. The U.S. has yet to consider the companion case brought by Boeing against Bombardier, concerning dumping accusations. This decision, due on October 5, could exacerbate tensions even further.