Belfast Telegraph

Bombardier's US sales tax 'could be altered' after deal with Airbus

By Business Reporters

Bombardier's workforce here still hasn't received assurances over its future despite US suggestions that a 300% tax on the C Series could be altered, it's been claimed.

Wilbur Ross's Department of Commerce imposed a preliminary duty on sales of C Series aircraft to the US, following a challenge by aerospace giant Boeing.

That has since threatened the future of some 4,000 jobs at Bombardier's Northern Ireland sites. Canadian-owned Bombardier produces the wings and part of the C Series fuselage in Belfast.

But Bombardier has now linked up with Airbus, which has a plant in the US, in an attempt to avoid the crippling tariffs. Last week, Bombardier announced a deal with a European airline for up to 61 C Series.

US commerce secretary Wilbur Ross referred to the dispute yesterday during an address at the CBI conference in London.

"We have obviously had discussions here because of Shorts (Bombardier) in Northern Ireland," he said. "We as of yet do not know very much about the proposed transaction between Bombardier and Airbus.

"As we understand it, they have yet to execute a definitive agreement, much less real details about where will things be produced and all that.

"So it would be premature to suggest what, if any, impact that transaction might have on the original preliminary ruling. Our rulings have only been preliminary and while the final determination generally is pretty consistent with the preliminary one, that is not always true."

He pointed to a recent case involving the US and Thailand, in which the final determination "totally abolished" an adverse preliminary ruling.

"This is a fair and open process. It's an open-minded one," he said.

"To the degree that we learn that any of the premises in the original ruling were wrong or have been modified, we would take that into consideration."

He rejected suggestions the Trump administration's handling of the C Series case was a foretaste of what the UK could expect from the free trade agreement (FTA) it wants to strike with the US following Brexit.

"Even countries with whom we are very friendly, as we are with the UK, and even countries like Canada and Mexico with whom we have an existing FTA, you do have occasional disputes, because even friends and FTA partners need to go by the rules," he said.

"The question is 'was the conduct between the governments, Bombardier and Shorts within acceptable standards or not?' If it wasn't, then it should be actionable. If it was, then it shouldn't be."

"... we understand the political sensitivity both here and in Canada. We understand about Shorts in Northern Ireland. We get all that.

"But the fundamentals remain: even our best friends really have to play by the rules. We intend to and we intend that you will do so."

But Davy Thompson of the Unite union said Mr Ross's words were "a routine statement offering no assurance whatsoever to the 4,000 Bombardier workers in Northern Ireland or the 20,000 workers in the broader economy whose jobs are sustained by Bombardier activities".

"What's needed is for the US government to rescind the punitive tariffs on the C Series entirely. They are designed to effectively shut the US market, the largest commercial airlines market in the world, to Bombardier's ground-breaking C Series planes," he said.

A Bombardier spokeswoman said: "We continue to defend our position and remain confident that the US authorities will come to the right conclusions."

Last month, Bombardier announced it is to cut another 280 staff in Northern Ireland.

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.