By Dave Myers II, Chair – For Truth and Liberty
A closely-watched trade dispute between Boeing and a Canadian firm has been resolved – not exactly as Boeing had hoped – but developments related to the case in recent months should be good news for American workers and enable Boeing to put the matter behind it.
The International Trade Commission, charged with evaluating claims of dumping, intellectual property rights infringements, and illegal subsidies, voted 4-0 against imposing import tariffs of almost 300 percent on Bombardier’s C Series passenger planes. Boeing claimed the Canadian firm received government subsidies that exceeded industry standards and practices, which enabled it to sell 75 of its C series to Delta at a price that would tilt the market for smaller passenger planes unfairly toward Bombardier and injure Boeing.
After reviewing all the facts over several months, commissioners said the tariffs could not be justified, largely because Boeing was not competing with Bombardier in this market segment. No competition, no harm. The C Series, depending on how it is configured, seats no more than roughly 135 passengers. Boeing’s closest comparable plane, the 737 series, is simply a bigger plane. When carriers are looking for planes in the 100+ size, they do not consider the 737.
That is not to suggest the 737 is struggling to survive. The company has almost 5,000 back orders for its 737 planes. That is great news for the company’s bottom line and for American workers since Boeing might have to add capacity to fill these orders.
Boeing’s warnings that Bombardier’s subsidies would threaten jobs in the United States were also upended by an unexpected twist when, last fall, Bombardier and Airbus announced they would combine forces to produce the C Series at an Airbus facility in Alabama. Again, this is great news for American workers. The decision is a sign of their confidence in the American worker and demonstrates that the U.S. is a good place to do business.
In the course of the ITC’s investigation, other developments revealed how Boeing’s petition could have unintended consequences for Boeing and U.S. workers. In December, Canada announced it would purchase 18 used F-18 fighter jets from Australia instead of new models made by Boeing. This was unwelcome news for local workers who were already contending with job insecurity following Boeing’s 2016 announcement that Boeing F/A-18s to be purchased by India might be built in India.
Boeing’s investments in India, Canada, Europe and other countries, just like the Bombardier-Airbus investment in Alabama underscores that the manufacturing and servicing airplanes has become a truly international undertaking. Ideally, however, companies like Boeing will continue to prioritize employment opportunities for Americans. Boeing’s petition for import tariffs against Bombardier might have initially rested on this goal but this became a moot point once the ITC looked at the facts.
At this point, Boeing should accept the ITC’s decision and channel its resources and energies into the abundant opportunities in the large passenger jet market segment and defense work. After all, this is where the company has indicated its best prospects are, not the smaller passenger jet arena. Boeing has been very public about this.
Given President Trump’s reconsideration of longstanding U.S. trade policies, other American companies might be tempted to ramp up petitions alleging unfair and illegal trade practices. These claims will be considered individually, based on facts and the merits. Shortly after the ITC’s decision was announced, Commerce Secretary Wilbur Ross immediately declared the 4-0 decision was proof positive that the “checks and balances” in adjudicating trade disputes works. Boeing should leave it there, for the good of its reputation and workers here in the St. Louis area and beyond. Continuing to battle with Bombardier will aggravate trade frictions and possibly prompt trading partners to rethink contracts in the works with Boeing. Unlike the development of Bombardier’s C Series, a series of tit-for-tat actions in the passenger plane sector could put American jobs on the line.