Delta refuses to pay tariffs on Bombardier CSeries jets
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[October 12, 2017]
By Alana Wise
NEW YORK (Reuters) - Delta Air Lines Inc on
Wednesday said it would refuse to pay a 300 percent U.S. tariff on
Canadian-built Bombardier CSeries jets, raising doubts about its
purchase of 75 of the new aircraft at a list price of more than $5
"We're not going to be forced to pay tariffs or anything of the ilk,"
Delta Chief Executive Ed Bastian said on the company's third-quarter
Delta is the only major U.S. carrier to buy the CSeries so far, and
Bastian called the U.S. Commerce Department's decision to impose
anti-dumping duties on the jets "nonsensical."
He said Delta still expects to take delivery of the CSeries order,
The U.S. tariff decision, sparked by rival planemaker Boeing Co, stems
from a claim that Bombardier used Canadian government subsidies to
bankroll the CSeries sale to Delta and dump the planes at "absurdly low"
The proposed duties would not take effect unless affirmed by the U.S.
International Trade Commission (ITC) early next year.
Shares of Bombardier, which is based in Canada, were up 3.78 percent at
$2.34 in afternoon trading.
Delta shares were up slightly, 0.85 percent at $53.15, on the airline's
stronger-than-expected third-quarter results.
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A Delta Airlines jet
takes off from Washington National Airport in Washington, U.S.,
August 9, 2017. REUTERS/Joshua Roberts/File Photo
Responding to Bastian's remarks, Bombardier said it was "confident the ITC will
reach the right conclusion given that Boeing did not compete for the Delta
"Delta has been supporting Bombardier throughout the process and its CEO, Ed
Bastian, reaffirmed the airline's intention to take possession of its CSeries
aircraft. This is the message that we should get out of this," spokesman Simon
How the extra costs of the planes would be covered remained unclear. Bombardier
has also said it would not pick up the tab for the trade duties. [nL8N1M75O0]
The CSeries dispute has spiraled into a broader discussion of trade agreements
between the United States and Canada, as U.S. President Donald Trump has warned
he would terminate the tri-national North American Free Trade Agreement unless
changes were made to address deficits within the trade pact.
(Reporting by Alana Wise; editing by David Gregorio and Tom Brown)
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