US Trade Commission Hands Bombardier Surprise Victory Over Boeing on CSeries Jet
In a stunning unanimous (4-0) decision Friday, the US International Trade Commission handed Canadian planemaker Bombardier a victory over Boeing, striking down punitive tariffs imposed by the US Department of Commerce on Bombardier's CSeries aircraft. No reasons were immediately released by the body, which is comprised of international trade experts, and is a quasi-judicial administrative entity that advises the US executive and legislative branch on trade matters.
Boeing had complained that the Canadian planemaker had taken advantage of government subsidies to price the CSeries below cost and unfairly win a huge 75-aircraft order from Delta Air Lines. This is the final verdict after almost a year of rulings and appeals on the matter.
In order to win, Bombardier needed at least three of the commission's four votes. A tied vote would mean that Boeing would prevail. A win for Boeing would have cemented a proposed 292% tariff for all CSeries aircraft sold to US customers — both past and future orders.
On the news, Bombardier's stock soared more than 15% on the Toronto stock exchange. Boeing's stock ended the day up slightly on Wall Street.
The biggest winner besides Bombardier and Airbus — which owns half of the CSeries program — is Delta. The US airline's 75-aircraft order is the largest CSeries order so far. It was this order that prompted Boeing's complaint.
In a statement, Delta noted that it was "pleased" by Commission's ruling "rejecting Boeing's anti-competitive attempt to deny US airlines and the US traveling public" the CSeries aircraft. Delta's statement points out that Boeing "offers no viable alternative."
Delta had previously stated that it wouldn't pay the tariffs, putting the future of the largest CSeries order and possibly of the program itself in jeopardy. But, today's ruling doesn't just mean that Delta will keep this order. Three other US airlines — JetBlue, Spirit and Sun Country — all wrote the US Trade Commission to express support for Bombardier. Since this is a move that could ice relations with Boeing, doing so would indicate a strong interest by these airlines in also purchasing CSeries aircraft.
In a press release Friday, Bombardier said: "Today’s decision is a victory for innovation, competition, and the rule of law. It is also a victory for US airlines and the US traveling public."
For its part, predictably Boeing said it was "disappointed that the ITC did not recognize the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the U.S. small single-aisle airplane market."
Now, we will have to wait to see how quickly Bombardier starts delivering CSeries aircraft to Delta. Along with the announcement that Airbus was acquiring half of the CSeries project, it was announced that Airbus would open a new $300 million assembly line in Mobile, Alabama, to produce CSeries aircraft for US customers. However, Airbus wisely waited for this final decision before starting construction on the assembly line.
Now, it'll be interesting to see if this additional manufacturing line comes to fruition or if that was just a negotiation tactic. Or perhaps Bombardier will begin producing CSeries aircraft for Delta in its Canadian manufacturing facility while the second line is built.
The CSeries aircraft are state of the art airliners. Plagued by program delays and with tepid interest from airlines, the CS100 and CS300 jets badly needed a big order, and Delta's acquisition of the aircraft provided a much-needed shot in the arm for the program. Having put the potentially devastating tariff issue to bed, Bombardier's single-aisle jet will be much more attractive for US domestic carriers.
The ITC now will submit an opinion and report to the Department of Commerce by February 13. A public version of the opinion/report is expected to be available by March 2.
Mike Arnot contributed reporting for this story.
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.