Boeing Competitors Teaming Up To Find A Way Around U.S. Tariffs

Two of Boeing's biggest competitors are teaming up to find a way around U.S. tariffs. Europe's Airbus will form a partnership with Canada's Bombardier to manufacture mid-sized planes that seat 100 to 150 passengers. As part of the deal, Bombardier will move production to an Airbus facility in Mobile, Ala., thus avoiding the tariffs.

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The skies have become the latest front in the Trump administration's growing trade fight with Canada. The dispute pits American jet maker Boeing against the Canadian company Bombardier. It was already a tricky negotiation involving big tariffs and threats of retaliation. Things got more tangled yesterday when the European company Airbus waded into the fray. North Country Public Radio's Brian Mann reports.

BRIAN MANN, BYLINE: Last month, the Trump administration slapped tariffs of more than 200 percent on Bombardier's new C-Series jetliners, which the Montreal-based company is selling to Delta Airlines. Boeing sparked the tariffs when the American company filed a complaint arguing that Canadian jets were being sold cheap thanks to big, unfair government subsidies. The penalty infuriated Canadian leaders. Here's Quebec premier Philippe Couillard.

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PHILIPPE COUILLARD: Let me tell you that the war is far from over and that we shall win.

MANN: Canada's foreign minister, Chrystia Freeland, also delivered a warning to Boeing and the Trump administration appearing on CBC Television.

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CHRYSTIA FREELAND: A trusted partner is not one who is trying to wreck your aerospace industry.

MANN: The stage appeared set for a nasty escalating trade fight. But late yesterday, Bombardier threw a kind of head fake, announcing a new partnership with the European jet maker Airbus. Airbus acquired a majority stake in the subsidiary that makes those C-Series jets, midsized planes that seat between 100 and 150 passengers. In a move designed to sidestep American penalties, many of the jets will now be manufactured at Airbus's existing plant in Mobile, Ala. Alain Bellemare is head of Bombardier.

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ALAIN BELLEMARE: This assembly line in the U.S. is one way to have a domestic product. The aircraft then become a domestic product for which you can have no import duty.

MANN: Boeing declined NPR's request for an interview, but the company released a carefully worded statement describing this deal as a questionable effort to skirt the recent findings of the U.S. government. This is a tough moment for Boeing. The aerospace giant does a lot of business in Canada and is currently in talks to sell a new generation of fighter jets to the Canadian military. Last week, Prime Minister Justin Trudeau put the fighter jet deal on hold. And at the same time, Boeing launched an ad campaign designed to bolster its bruised image with Canadians.

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UNIDENTIFIED WOMAN: How does Boeing measure our commitment to Canada in years, in jobs?

MANN: This tense moment comes as the Trump administration pushes to renegotiate the broader NAFTA trade agreement. Talks continued today in Washington. So far, Canada and Mexico have resisted the White House's biggest proposals, including a change to the way these trade disputes are settled. Brian Mann, NPR News.

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