Lane Powell previously analyzed the trade dispute over the Bombardier C Series aircraft underway in the U.S. International Trade Commission (ITC).
On September 26, the U.S. Department of Commerce announced an affirmative, preliminary determination that Bombardier received anticompetitive subsidies from the governments of Quebec and Canada. The Department of Commerce ordered U.S. Customs and Border Protection to collect a countervailing duty of 219.63 percent on all passenger aircraft with 100- to 150-person capacity imported from Canada, effectively targeting only the C Series.
The Governments of Canada, and Quebec, and Bombardier responded swiftly with statements condemning the move. The response from the Government of Canada also continues to put in doubt its plans to purchase fighter jets and other military aircraft from Boeing, which petitioned the ITC to impose a duty.
The Department of Commerce intends to release its determination on antidumping duties to be levied against the C Series in December 2017, and at that time will release a final determination on the countervailing duties to be imposed. Countervailing duties are intended to offset anticompetitive government subsidies of products sold in the United States, while antidumping duties are intended prevent the anticompetitive importing and sale of goods at less than fair-market value. Once the Department of Commerce makes those determinations, the ITC will consider the evidence and make its final determination on duties, expected in early 2018.
ITC determinations are appealed to the U.S. Court of Appeals for the Federal Circuit. Involvement by the World Trade Organization (WTO) is also likely, as the WTO appointed a panel to investigate C Series subsidies at the request of Embraer, the Brazilian aircraft manufacturer which markets the competing E-195 aircraft.
Lane Powell’s Antitrust and Trade Regulation and Transportation Teams will monitor continuing developments in this dispute and provide updates as they occur.