US Trade Commission rules against Bombardier in CSeries dispute

The United States International Trade Commission has determined that Bombardier subsidies and CSeries sales tactics may have injured US industry, a ruling that allows a broader US government trade investigation to proceed.

"There is a reasonable indication that a US industry is threatened with material injury by reason of imports of 100- to 150-seat large civil aircraft from Canada that are allegedly subsidised and sold in the United States at less than fair value," says the Trade Commission in a 9 June media release.

"As a result of the commission’s affirmative determinations, the US Department of Commerce will continue to conduct its antidumping and countervailing duty investigations on imports of this product from Canada," the Trade Commission adds.

The US Department of Commerce intends to issue a preliminary countervailing duty determination around 21 July, followed by an antidumping duty determination around 4 October, says the US Trade Commission.

Bombardier downplayed the ruling.

"Today's preliminary decision was expected given the very low bar for Boeing in this first step of the process. Going forward, we are confident that a detailed review and analysis of the facts will demonstrate that Boeing's claim is without merit,” the company says in a statement.

Boeing on 27 April filed a petition with US trade authorities claiming a heavily-subsidised Bombardier injured US industry by selling CSeries at artificially low prices in the USA.

Those low prices depressed prices for competing 737-700s and 737 Max 7s, Boeing said.

Specifically, the US airframer alleged that Bombardier sold 75 CS100s to Delta in 2016 at a price of about $20 million each. The aircraft cost $33.2 million each to produce, Boeing claimed.

Boeing says Bombardier was able to make the deal because it received $2.5 billion in government equity infusions and billions more in other subsidies.

Bombardier has repeatedly denied the allegations.

It has insisted Boeing's price estimates were incorrect and argued that the CS100, which carries about 108 seats, does not even compete with 737-700s or 737 Max 7s, which carry 126 to 138 seats.

Boeing abandoned the 100-seat aircraft market when it stopped making 717s a decade ago, Bombardier has said.

The Montreal manufacturer also argued that all airframers grant discounts to customers who purchase new aircraft models – a reflection of risks associated with placing new types into airline service.

While the US Trade Commission's probe focused on potential harm to US industry, the Commerce Department is focused on whether Bombardier "unfairly dumped" the aircraft in the USA, and if the Canadian producer received unfair subsidies.