X Aerospace stocks Boeing (BA) and Airbus (EADSY) will be in focus tomorrow, when the U.S. International Trade Commission is expected to rule on a massive tariff the Commerce Department imposed against Bombardier's new narrow-body jet.
The ITC was asked to approve a USA commerce department recommendation to hit the Canadian company's CSeries jet with a near-300 per cent duty on sales to American carriers.
In a statement, Bombardier said the ITC's decision was a "victory for innovation, competition, and the rule of law".
A spokesperson for Boeing said it was "disappointed" by the ITC's decision and that it would "review the detailed conclusions when they are released".
"Delta is satisfied by the ITC's decision dismissing Boeing's anticompetitive endeavor to deny USA aircrafts and the US flying out community to the best in class 110-situate CS100 air ship when Boeing offers no practical option", Delta said.
After stunning the aviation world in October with its deal to bail out Bombardier by acquiring a majority stake in the CSeries, Airbus announced it will build an assembly line in Mobile, Alabama, to build the planes for the USA market.
Chicago-based Boeing first brought the case to the Commerce Department previous year, arguing Canadian and British governments were illegally subsidizing the C-Series's costs.
The ITC vote contrasts with President Donald Trump's decision this week to slap tariffs on solar panels and imported washing machines on the grounds that they're harming USA industry. About 40 percent of the financing backed by the Export-Import Bank, for example, goes to subsidize Boeing sales.
The president exercises more direct control over other trade remedies, such as the "safeguard" tariffs he imposed this week on imported solar panels and washing machines, as well as potential actions against China for stealing trade secrets. Boeing has claimed Bombardier sold each 108-133-seat CS100 for just $19.6 million (€15.8m), arguing they actually cost $33.2 million (€26.7m) to make.
The case before the ITC had also risked heightening trade tensions between the U.S. and the UK. The Canadian government last month chose to purchase used F/A-18 Hornet fighters from Australia rather than buy 18 new Boeing Super Hornets. More obviously is that the ITC accepts that the C Series is not a direct rival to Boeing. Airbus agreed to take over the CSeries program after the Commerce Department proposed the duties.
"This is not the behavior we expect from Boeing and it could indeed jeopardize our future relationship with them", British Defense Secretary Michael Fallon said a year ago. "The C-Series is now ready for take-off".
The Canadian government told the commission that it can't side with Boeing's "unprecedented" argument because there is no evidence that any C Series planes will be imported into the United States because the planes destined for US customers will be assembled in Alabama.
This unexpected good turn of events is tempered by the devastating news that around 300 jobs have been put in serious danger at the Kilroot and Ballylumford power stations because of a failure to win a significant contract. "Integration planning is going well and we look forward to delivering the C Series to the U.S. market so that U.S. airlines and the U.S. flying public can enjoy the many benefits of this remarkable aircraft".
Boeing closed little changed, while Delta gained 0.7 percent. "We are full-speed ahead", Bombardier tells FlightGlobal.