Delta is Refusing to Pay Tariffs on Bombardier CSeries Jets

Oct 11, 2017

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The launch of the Bombardier CSeries jet isn’t going so well, at least in the US. Despite receiving an order for 75 Bombardier CS100 jets from Delta, the company has since faced multiple setbacks at the hands of US regulators. The latest blow was dealt by the US Department of Commerce on Friday, increasing the tariffs US customers have to pay on the new jets to 300%.

The tariffs are being levied after Boeing filed a formal complaint that Bombardier had received government subsidies from the Canadian government. The filing claimed that the Canadian manufacturer sold the aircraft to Delta at “absurdly low” prices to undercut the Boeing 737. Delta has argued that Boeing doesn’t have a comparable jet to the 110-seat 2-3 arranged Bombardier CS100. Yet, US regulators have sided with Boeing.

After the initial 220% tariff was announced, Delta CEO Ed Bastian called the ruling “absurd” and said that the move would make the aircraft unaffordable. So, analysts and investors were anxious to hear what Delta’s executives had to say about the new ruling at the company’s Q3 earnings call Wednesday morning.

And, they weren’t disappointed. Calling the new ruling “nonsensical”, Delta’s CEO stated “We’re not going to be forced to pay tariffs or anything of the ilk.” With Bombardier and Delta both refusing to foot the bill for the 300% tariffs, it seems that Delta’s Bombardier order will be pulled if the duties are confirmed by the U.S. International Trade Commission (ITC) early next year.

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