PM strongly suggests government will stop ordering planes from US firm as she hits out at ‘creeping protectionism’

Theresa May has dropped a strong hint that the government will stop ordering planes from the US aerospace giant Boeing following the decision to slap punitive tariffs on planes part-made in Belfast by the Canadian company Bombardier.

Angered by the threat to 4,000 jobs in one of the poorest parts of the UK, the prime minister said Boeing’s action was not the sort of behaviour Britain expected from a long-term partner but was part of a “creeping protectionism” around the world.

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

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Earlier this week the US Department of Commerce backed Boeing in an action that could lead to 219% tariffs being placed on planes made by Bombardier – a move that would make them much more expensive in the key US market.

The preliminary decision taken in Washington, while consistent with the protectionist leanings of Donald Trump has cast a shadow over the UK government’s attempts to seek a new free trade deal with Washington after Britain leaves the EU.



Expressing disappointment at the decision, May said she was working with the Canadian prime minister, Justin Trudeau, to seek a different outcome. Bombardier employed 4,000 people in Northern Ireland and was “very important for us”, the prime minister said.

“I want the UK to be a global champion of free trade. Those who believe in it need to stand up and explain the benefits and show how free trade is important in raising living standards,” she said. “Those are discussions we need to have because I see protectionism creeping in around the world.”

May identified protectionism as one of the “failed ideologies” of the past and said abandoning the free market completely would harm rather than help the poor.

The prime minister was speaking at a conference to mark the 20th anniversary of Bank of England independence.

Mark Carney, the Bank’s governor, said Threadneedle Street’s freedom to set interest rates since 1997 had helped the economy through the financial and economic crisis of a decade ago and meant the Bank was well placed to address a range of possible developments around Brexit.

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Carney warned that there were limits to what the Bank could do to prevent Brexit leading to lower real incomes, but said it had enough flexibility to make departure from the EU a smoother process.

“In exceptional circumstances like today when the economy is facing profound structural change, the monetary policy committee can extend the horizon over which it returns inflation to target from above, in order to balance the effects on jobs and activity.

“After all, even though monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU, it can influence how this hit to incomes is distributed between job losses and price rises.”

May said Britain was leaving the EU not Europe and was seeking a solution that was good both for Britain and other EU members. The transition deal the government is seeking after the official exit date in March 2019 would be time-limited and some aspects might take less than the two-year period the prime minister is seeking.