Boeing-Bombardier Dispute Shakes UK-US Relations

After the U.S. Department of Commerce decided to slap heavy import tariffs on jets partly made in Northern Ireland, the so-called “special relationship” between the U.S. and U.K. was looking decidedly shaky.

Hints that the trade relations with the U.S. aerospace company could be further affected was given by U.K. Prime Minister Theresa May after the U.S.’s decision to slap import tariffs of 219.6 percent on Bombardier’s C-Series jets after a complaint from Boeing.

May is reported to have called her U.S. counterpart to discuss the matter and said she was disappointed at Boeing’s behavior.

“What I would say in relation to Boeing is that of course we have a long-term partnership with Boeing in various aspects of government and this is not the sort of behavior we expect form a long-term partner and it undermines that partnership,” May said.

She also defended free trade and criticized “a return to protectionism in international trade.” While stopping short of canceling existing orders with Boeing, although he hinted that future contracts could be at risk, the U.K. Defence Secretary Michael Fallon made similar comments.

“This is not the behavior we expect from Boeing and it could indeed jeopardize our future relationship with them,” Fallon told reporters in Belfast, Reuters reported. “Boeing wants and we want a long-term partnership but that has to be two-way.”

The allegations against the Canadian plane maker Bombardier is that it has received state subsidies form the U.K. and the Canadian governments and the tariffs were imposed after Boeing placed such allegations with the U.S. government.

The U.S. Department of Commerce agreed, saying Wednesday that: “The U.S. values its relationships with Canada, but even our closest allies must play by the rules.”

U.S. Secretary of Commerce Wilbur Ross said in a statement that: “The subsidization 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.”

With May tweeting the government would seek to protect jobs in Northern Ireland and that she was “bitterly disappointed by initial Bombardier ruling”, the U.K. and Canada were quick to condemn the decision. And reported to be similarly disappointed by the move was Canadian PM Justin Trudeau.

Particularly as May’s government is reliant on ministers in the region to prop up her minority government in London, the U.K. Prime Minister is under pressure to protect jobs in Northern Ireland, and Bombardier employs around 4,000 people in the U.K.

Bombardier “makes a huge contribution to the Northern Irish economy. They are a major regional employer and support a wider supply chain that stretches across Northern Ireland”, said Angela McGowan, CBI Northern Ireland Director.

In a statement, she added: “The decision by the U.S. Department of Commerce represents a challenge to the Northern Ireland economy and places an important driver of regional economic growth at risk.”

(Adapted from CNBC)


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