After Delta jet order, U.S. proposes tariffs on Bombardier


A deal for the sale of Bombardier jets to Delta Air Lines is under scrutiny over subsidies, and now the U.S. Commerce Department is proposing tariffs.

Aircraft manufacturer Boeing Co. had raised concerns about the deal between the Canadian aircraft manufacturer and the Atlanta-based airline, and requested an investigation.

Siding with Boeing, U.S. Secretary of Commerce Wilbur Ross announced a preliminary determination Tuesday that the subsidies amounted to 219.63 percent and that duties would be based on those preliminary rates.

“The subsidization of goods by foreign governments is something that the Trump Administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination,” Ross said in a written statement.

The Commerce Department said enforcement of U.S. trade law “is a prime focus of the Trump administration.”

Still pending is a final determination by the Commerce Department in December and by the U.S. International Trade Commission in February.

Delta announced the deal with Bombardier in April 2016 to buy 75 CS100 jets to be configured with about 110 seats each.

Delta would start flying the planes in spring 2018.

The order could be valued at $5.6 billion, but airlines typically negotiate steep discounts for large plane orders. Scoring the Delta order was also a big win for Bombardier, in competition against heavyweights Boeing and Airbus.

When announcing the order, Delta CEO Ed Bastian called the deal “opportunistic”. He said he believed Delta’s order made Bombardier “a third competitor,” along with Boeing and Airbus, “and we’re thrilled to be able to have that choice in the marketplace.”

Delta in a written statement Tuesday emphasized that the Commerce Department’s decision is preliminary and that the International Trade Commission’s determination will be the “real decision.”

“We are confident the USITC will conclude that no U.S. manufacturer is at risk because neither Boeing nor any other U.S. manufacturer makes any 100-110 seat aircraft that competes with the CS100,” Delta said.

“Boeing had the chance to compete with Bombardier for Delta's purchase of aircraft in this size range, but Boeing's only proposed alternative to the CS100 was to offer Delta used Brazilian-made regional jets,” Delta said. “Boeing has no American-made product to offer because it cancelled production of its only aircraft in this size range - the 717 - more than 10 years ago.”

Delta struck a deal in 2012 for used Boeing 717s from Southwest Airlines, which inherited the jets from AirTran Airways in a merger.

Bombardier issued a statement saying: “The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs.”


Reader Comments ...


Next Up in Travel

How to save yourself a (snow)pile of cash

With a whiff of winter in the air, skiers' thoughts naturally drift to snowy mountains, fireside après-ski drinks and the macroeconomic concept of inelastic demand - used to describe products for which price can increase astonishingly, regardless of supply, without hurting demand. This is especially true of daydreamers who want to take their...
Special effects are added to Queen Mary’s ghost tour
Special effects are added to Queen Mary’s ghost tour

LOS ANGELES — The Queen Mary, a retired ocean liner that has become a floating hotel in the Long Beach harbor, has turned to the type of special effects made famous in Hollywood to try to boost visitor numbers. For more than 15 years, the ship has offered a ghost tour — dubbed the Ghosts and Legends Tour — to draw and scare fans who...
How to pack the perfect traveling art studio
How to pack the perfect traveling art studio

Finding the time to create meaningful art on the road can be a challenge all by itself. Making room for all of your favorite supplies is another hurdle altogether. This fact was driven home to me quite clearly during a fairly intense creative awakening over the past year. As someone who enjoys creating with a variety of materials per piece, I look...
A complicated race to the best cruise Wi-Fi
A complicated race to the best cruise Wi-Fi

Seemingly every cruise line now wants to offer its guests the fastest Wi-Fi internet connection at sea, but the reality of doing so is not so cut and dried.  The reason why is not dissimilar to the struggle to find bars on our cellphones: Wired is still more reliable than wireless. When on land, even Wi-Fi connections are primarily terrestrial...
What you need to know about the new ID law and travel

In the past several months, there has been plenty of conversation about the Real ID Act and how it will affect air travelers. Passed by Congress in 2005, the act is intended to prevent identity fraud, and starting on Jan. 22, 2018, flyers who reside in some states, even if they’re flying domestically, will need identification other than a driver&rsquo...
More Stories