US Department of Commerce Initiates Investigation of Imports of Canadian Aircraft
US Department of Commerce Secretary Wilbur Ross has announced the initiation of new antidumping (AD) and countervailing duty (CVD) investigations to determine whether imports of 100- to 150-seat civil aircraft from Canada are being unfairly dumped in the United States, and whether Canadian producers are receiving alleged unfair subsidies.
The investigations were initiated following a petition filed by The Boeing Company on April 27 seeking relief of planned imports of Canadian civil aircraft.
The move by the Commerce Department may be regarded as premature, as the aircraft in question have yet to be imported into the United States. The deal in question, announced in April 2016, involves the sale by Bombardier Commercial Aircraft to Delta Air Lines of 75 CS100 aircraft with options for an additional 50 of the same aircraft. Based on the list price of the CS100 aircraft, the order is valued at $5.6 billion.
Canada trade has been in the crosshairs of Trump administration international trade enforcement actions and comments of late. The Commerce Department hit Canadian softwood lumber imports with preliminary antidumping and countervailing duties. President Donald Trump said Canadian dairy policies hurt US farmers and has long slammed the North American Free Trade Agreement as a “disaster.” Canada is the largest trading partner of the United States.
If the Commerce Department determines that Canadian civil aircraft are being dumped into the US market, and/or receiving unfair government subsidies—and the US International Trade Commission determines that those practices are causing harm to the US industry—the Commerce Department will impose duties on those imports in the amount of the dumping and/or unfair subsidies.
Boeing alleges a dumping margin of 79.82 percent and unfair subsidies of 79.41. Commerce has initiated an investigation into 14 alleged subsidy programs.
The ITC will make its preliminary determinations on or before June 12. If the ITC preliminarily determines that there is threat of injury then the Commerce Department investigations will continue, with a preliminary countervailing duty determination in July 2017, followed by a preliminary antidumping determination in October 2017, unless these deadlines are extended.
If the Commerce Department preliminarily determines that dumping or subsidization is occurring, it will instruct US Customs and Border Protection to start collecting cash deposits from all US companies importing the subject civil aircraft from Canada.
Final determinations by the Commerce Department in these cases are scheduled for October 2017 for the countervailing duty investigation, and December 2017 for the antidumping duty investigation, but those dates may be extended. If the Commerce Department does not find that products are being dumped or unfairly subsidized, or the US International Trade Commission does not find in its final determination there is harm to US industry, the investigations will be terminated and no duties will be applied.
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