Canadian Prime Minster Justin Trudeau has declared that Canada will not do business with Boeing, threatening to look elsewhere to supply Canada’s next generation of fighter jets.
Speaking at a joint press conference with British Prime Minister Theresa May, Trudeau stated—
We have obviously been looking at the Super Hornet aircraft from Boeing as a potential significant procurement of our new fighter jets…But we won’t do business with a company that’s busy trying to sue us and trying to put our aerospace workers out of business.
Boeing vs. Bombardier
The issue centers on a trade dispute between Boeing and Canadian aircraft manufacturer Bombardier.
Bombardier is the producer of the CSeries aircraft, a narrow-body, twin-engine, medium-range jetliner that offers a compelling alternative to Airbus, Boeing, and Embraer jets. The C300 will compete directly with the Boeing 737 MAX 7. The C100 does not directly compete with any Boeing jet and is at the center of the controversy.
Boeing accuses Bombardier of illegally “dumping” aircraft backed by government subsidies in the U.S. market, distorting demand and pricing. Earlier this year, Delta signed an order for 75 of the CS100 aircraft.
Boeing is not suing the Canadian government directly, but has alleged that Bombardier sold each aircraft at $13.8 million less than it cost to produce. Boeing is seeking redressing via the World Trade Organization and the U.S. Commerce Department has launched its own investigation. Bombarider was bailed out by the Quebec government last year and has also been granted $300 million in loans from the Canadian federal government.
Should the investigation reveal dumping occur, U.S. Customs / Border Control will begin collecting cash from Delta (representing the difference between the actual price and paid price).
This short clip from CNBC breaks down the dispute nicely–
And you can learn more details here.
Prime Minster May has been tasked with trying to broker peace and will bring up the issue in a meeting with U.S. President Donald Trump this week. As is often the case, disputes between two “private” aircraft manufacturers are inextricably linked to the state itself. While Trudeau’s tough talk may simply be a bluff, this matter could easily harm diplomatic relations between the Canada and the USA…and has perhaps already done so.