BREAKING NEWS: International Trade Commission Knocks Down Duties on Canadian Aircraft - Global Trade Magazine
  January 26th, 2018 | Written by

BREAKING NEWS: International Trade Commission Knocks Down Duties on Canadian Aircraft

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  • In December 2017, the Commerce Department slapped a 300-percent import tariff on Canadian planes.
  • Commerce’s decision applied to a $5-billion deal for Bombardier to sell aircraft to Delta Airlines.
  • The Boeing Company petitioned the Commerce Department to undertake investigation of Canadian imports.

In a unanimous decision, the United States International Trade Commission (ITC) knocked down antidumping (AD) and countervailing duties (CVD) on imports of Canadian aircraft, determining that those imports do not harm a US industry.

In December 2017, the Commerce Department determined that exporters from Canada sold 100- to 150-seat large civil aircraft in the United States at less than fair value and that Canada provides unfair subsidies to producers of those aircraft, and slapped a 300-percent import tariff on the planes.

Commerce’s decision applied specifically to a $5-billion deal for the Canadian aircraft manufacturer Bombardier to sell aircraft to Delta Airlines. The Boeing Company petitioned the Commerce Department to undertake the investigation.

But in order for Commerce’s duties to stick, the ITC would have had to make a separate determination that the imports harmed a US industry. In its surprise decision declining to make that determination, the Commerce Department may not now impose its punitive duties on the Canadian imports.

“Today’s decision is a victory for innovation, competition, and the rule of law,” Bombardier said, in a statement. “It is also a victory for US airlines and the US traveling public.”

“We are disappointed that the International Trade Commission did not recognize the harm that Boeing has suffered,” said Boeing spokesman Dan Curran.

One of the issues involved in the case was whether Bombardier’s planes compete with Boeing’s. The US company contended that Bombardier C Series aircraft complete with its narrowbody 737 MAX 7.

Of interest also is that Bombadier’s airplanes have not yet been imported, leading some to criticize Commerce’s investigation as premature in the first place.

Boeing could still appeal the case to the Court of International Trade in New York and the US government could take the case to World Trade Organization.

A growing number of companies are petitioning Commerce to investigate AD and CVD matters, hoping for some protection from the Trump administration. Today’s decision demonstrates that protectionist measures will not come automatically.