PM says she will work to protect jobs at Canadian aircraft maker in Northern Ireland after US imposes 219% trade levy

This article is more than 2 years old

This article is more than 2 years old

The government has warned Boeing it could lose UK defence contracts over its part in a US move to slap punitive tariffs on rival Bombardier, in a dispute that threatens to sour trade relations between London and Washington.

Defence secretary Michael Fallon stepped up the government’s response to the tariffs, warning that Boeing’s assault on Bombardier “could jeopardise” its chances of securing government contracts.



And business secretary Greg Clark joined the chorus of disapproval, branding the tariff, which would be imposed on sales of the C-Series to US airline Delta, “unjustified” and vowing to work with the Canadian government to get it overturned.

Q&A How does state aid affect the Bombardier dispute? Show Hide The US commerce department has upheld Boeing’s claim that Bombardier was able to offer its C-Series planes to US airline Delta for a vastly reduced price because of illegal state subsidies from Canada and the UK, violating global trade rules. Under international rules, unfair subsidies from governments can take the form of grants, loans, equity injections, tax breaks and production contributions, if they give a company or an industry an unfair competitive advantage over foreign rivals. In this case, Boeing claims that a US$1bn (£750m) bailout of Bombardier by the provincial Quebec government in Canada in 2015 unfairly enabled the firm to sell its C-Series aircraft in the US at below cost price.

The claim also relates to the Northern Ireland Executive and the UK government, which pledged to invest £135m in a new factory in Belfast where the wings for the C-Series planes are manufactured.

In a series of tweets from the official Twitter account of the prime minister’s office, No 10 said: “Bitterly disappointed by initial Bombardier ruling. The government will continue to work with the company to protect vital jobs for Northern Ireland.”

UK Prime Minister (@Number10gov) Bitterly disappointed by initial Bombardier ruling. 1/2

UK Prime Minister (@Number10gov) The Government will continue to work with the company to protect vital jobs for Northern Ireland. 2/2

Bombardier employs 4,000 people at its plant in East Belfast, around 1000 of whom work on the construction of wings and fuselage for C-Series jets being sold to Delta.

In an interim decision, the US Department of Commerce agreed with Boeing’s case that Bombardier had received unfair, anti-competitive state support from the Quebec regional government.



Bombardier, which has also received £113m in repayable funding from the UK government, called the decision “absurd and divorced from the reality about the financing of multibillion-dollar aircraft programmes”.



The tariff would more than triple the cost of a C-Series aircraft sold in the US to about $61m per plane, based on Boeing’s assertion that Delta received the planes for $19m each.



The duty will only be imposed if the DoC’s final verdict, due in February, does not change.

The decision is a particular blow to Prime Minister May, who has personally lobbied US president Donald Trump to persuade Boeing to drop its legal action, in order to protect jobs in Northern Ireland.



And Labour’s shadow industrial strategy minister Chi Onwurah lashed out at the apparent failure of the Prime Minister’s efforts



“It’s a damning indictment of the criminal negligence and complacency of Theresa May and her government, and a sign of their entire lack of international negotiating skills which bodes really badly for our post-Brexit negotiations,” she said.

Liberal Democrat leader Vince Cable said: “Do we really believe the US will save us from Brexit with a comprehensive trade deal, when this is how they deal with fair and free international competition?”



A UK government spokesperson said: “As the prime minister said last week, we will continue to strongly defend UK interests in support of Bombardier at the very highest level because an adverse outcome risks jobs and livelihoods among the 4,200 skilled workers in Belfast.



“Boeing’s position in this case is unjustified and frankly not what we would expect of a long-term partner to the UK – as well as damaging the wider global aerospace industry.”

Joe Walters, who is in his 30s and works in material logistics at the Bombardier plant in east Belfast, told the Guardian there were many older workers at the factory seeking to leave the company as a result from the US ruling.



Walters said he wanted May and the British government to take a harder line with Boeing to end the dispute with Bombardier.

“The Canadian government has already stated that it will not do business with Boeing if it continues to try to break Bombardier. The British government needs to be as hardline as that. It’s simple, forget appealing to Donald Trump – he’s too busy trying to kill us all with his contest with North Korea.”

Geordie Burnside, a shop steward at the Belfast plant, says the size of the tariff has taken everyone by surprise.

“I’ve been getting phone calls from early morning asking why the ruling had slapped down such an enormous tariff. They cannot believe the enormity of it or get their heads around it. There have been a lot of tough times at this factory over the last 26 years and we got through. I hope that the company will appeal and the battle isn’t over yet.”

Trades Union Congress general secretary Frances O’Grady said the US deciison was “grim news”.

“The government must stand up for those workers, and for the Northern Ireland economy. Expressing disappointment is not enough. The prime minister must put genuine pressure on the US government to rethink this decision now.

“This should be a wake-up call to those who view the US as our trading saviour after Brexit. The US slapping huge tariffs on key UK exports is not a good sign of things to come.”

DUP convinces May to raise Northern Ireland plane jobs with Trump Read more







