US Bombardier ruling: Theresa May 'bitterly disappointed' at Trump administration's tariff decision

The Prime Minister raised the issue with US President Donald Trump following pressure from the Democratic Unionist Party, whose 10 MPs are propping up Ms May's minority government

Ben Chapman
Wednesday 27 September 2017 09:11 BST
Defence Secretary hints government may ban new contracts with Boeing over Bombardier decision

Theresa May is "bitterly disappointed'' by the US government's decision to impose a 219 per cent tariff on a new model of passenger jet built by one of Northern Ireland's biggest employers, Downing Street has said, despite the Prime Minister personally lobbying Donald Trump on the matter.

Unions accused Ms May of being "asleep at the wheel" and said the US Department of Commerce's decision risked thousands of jobs at Bombardier.

The Canadian multinational employs more than 4,000 people in Belfast with many more jobs in Northern Ireland are supported through the manufacturer's supply chain.

The US was expected to impose a tariff on imports of the new jet, a direct competitor for the American aviation giant Boeing. But the sheer size of the tariff is embarrassing for Ms May, who is understood to have raised the issue with the US President in a phone call earlier this month.

The dispute began with complaints from Boeing that Bombardier received unfair state subsidies from the UK and Canada, allowing the sale of airliners at below cost price in America.

Bombardier vowed to fight the ruling which it described as "absurd". The company is due to start delivery of up to 125 new jets to Delta Airlines next year as part of a $5.6bn (£4.2bn) deal signed in 2016.

Union leaders slammed the Prime Minister for failing to do more to lobby for British workers.

GMB national officer, Ross Murdoch described the decision as a "hammer blow to Belfast" and accused Ms May of being "asleep at the wheel when she could and should have been fighting to protect these workers".

Jimmy Kelly, Unite regional secretary, said: “The decision taken by the US department of commerce was not unexpected - unfortunately it is unlikely to be overturned by President Trump whose protectionist tendencies are well-known.

“The threat of punitive tariffs on the C-Series will cast a shadow over Bombardier's future unless the company can source alternative and substantial sales outside the US market.”

It is understood the Prime Minister raised the issue following pressure from Democratic Unionist Party leader Arlene Foster, whose 10 MPs are propping up Ms May's minority government.

Ms Foster said: “This is a very disappointing determination, but it is not the end of the process and there are further steps that will follow.

“The C-Series is a hugely innovative aircraft that is vital to Bombardier's operations in Belfast. It is this innovation that sets the C-Series apart and it is not in direct competition with Boeing.”

Bombardier's deal to supply billions of pounds worth of jets is in jeopardy after the US Commerce Department ruled that Bombardier received an unfair subsidy in the form of £135m investment pledge by the UK Government and Northern Ireland's power sharing administration. The firm also received $1bn from the Quebec government in 2015.

US authorities say this allowed Bombardier to supply aircraft at an implausibly low price of around £19m, making it impossible for Boeing to compete. Those aircraft will now cost around £61m once the interim tariff is applied.

US secretary of commerce Wilbur Ross said on Wednesday: “The US values its relationships with Canada, but even our closest allies must play by the rules.

“The subsidisation of goods by foreign governments is something that the Trump Administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination.”

Critics of the ruling have pointed out that Boeing itself has received billions of dollars of generous US state contracts which amount to effective subsidies.

Ms May's reaction to the interim ruling will be seen as a test of her government's ability to guide the UK economy into its new trade relations after Brexit.

Union bosses called on the Prime Minister to follow the hard line taken by her Canadian counterpart, Justin Trudeau, who said earlier this month that Canada would not purchase any of the aerospace giant's Super Hornet jets if it continues to pursue the lawsuit. "We are not going to do business with a company that is suing us and trying to put our aerospace workers out of a job,” he said.

On Wednesday, Labour leader Jeremy Corbyn said Ms May must stand up to Donald Trump over the issue. The Prime Minister cannot, "bet our economic future on a deregulated trade deal with the US", Mr Corbyn said in his keynote address to the Labour conference in Brighton.

He continued: "Our government has a responsibility. It cannot meekly go along with this dangerous course.

"If the special relationship means anything, it must mean that we can say to Washington: 'that way is the wrong way'. That’s clearly what’s needed in the case of Bombardier where thousands of jobs are now at stake."

Corbyn: Thousands of jobs at Bombardier are now at stake

Unions also urged ministers to take action.

“Despite this blow, the Bombardier jobs can still be safeguarded, said Jimmy Kelly of Unite. "The UK government must now intervene to secure orders from British carriers for Bombardier aircraft — they should also immediately review all contracts with Boeing,”

The Government issued a statement on Wednesday stating that it would “continue to strongly defend UK interests” and describing Boeing’s position as “unjustified”. Defence Secretary Michael Fallon later warned that Boeing could be dropped from getting new contracts with the Government.

However, any decision to reconsider Government contracts with the aerospace giant will have to be weighed up against the roughly 16,500 jobs it supports in the UK. The company began construction of a new facility in Sheffield just last week.

Bombardier has the option to appeal the ruling in a US court or take it to a dispute-resolution panel under NAFTA. Alternatively, the Canadian government could take the case to the World Trade Organization.

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