Free Trade

In Rare Move, U.S. International Trade Commission Rejects Ludicrous Tariffs on Canadian Jets

Meanwhile, tariffs pile up on products that lots of Americans actually buy.

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Bombardier
Tr3gi/Dreamstime.com

A trade panel shot down a plan to put tariffs on imported jets late last week. It was a rare setback for American protectionists, who have been riding high recently.

On Friday, the U.S. International Trade Commission (ITC) rejected the staggering 300 percent duties that the Commerce Department wanted to slap on the Canadian jet maker Bombardier. The Commerce Department's push had come at the request of Boeing, which claimed that Canada's subsidies to Bombardier's planes were unfair and caused great harm to America's aircraft industry.

In a unanimous vote, the ITC declared that U.S. industry was not "not materially injured or threatened with material injury" by the 75 jets Bombardier intended to sell to Delta.

The decision is welcome but narrow. Boeing made some particularly absurd demands that even U.S. trade law could not accommodate, heavily slanted though it is to favor claims of injury from domestic producers.

Under current law, the ITC—which operates as an independent, quasi-judicial body—must make two findings before it can impose anti-dumping duties of the kind Boeing was seeking against Bombardier: first, that a particular product is being subsidized, and second, that this subsidy is harming domestic industry.

That Bombardier is subsidized is without question. In 2015 the company received a $1 billion bailout from Quebec's provincial government, and last year the national government gave it a $300 million loan.

But the idea that it was causing injury to the domestic industry was a real stretch. Boeing did not bid on the Delta contract that Bombardier eventually won. It does not make the type of smaller aircraft the Canadians are accused of trying to dump into the U.S. market. No subsidized Bombardier jets had even been shipped to the United States when Boeing made its complaint, making the company's claims of injury entirely speculative.

So the ITC rejected Boeing's petition. Aside from that, though, the panel has ruled in favor of producers seeking trade barriers in every case decided thus far this year. It has found imports of everything from paper and metal tubing to cabinets and tool chests to be both subsidized and guilty of causing material harm to U.S. industries.

Things are even less restricted with "safeguard tariffs." These require no finding that a good has been subsidized, only that there has been a surge in its imports and that this has caused a domestic inductry to lose profits and market share.

Such was the case with the washing machine tariff imposed at the beginning of last week. Note that unlike jet aircraft, which most Americans would consider a luxury, washing machines are essentially a household necessity. So tariffs are coming directly out of average consumers' pockets.

Already LG Electronics—a Korean maker of washing machines—has told U.S. retailers that it will be upping its prices in response to the 20 to 50 percent tariffs now being applied to its products. Market analysts predict the price of new washers will rise by between $70 and $100.

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  1. I wonder what it would be like to live in a free trade world. Cheaper or more expensive?

    1. Cheaper! More of your money would go to producers, to fund their production efforts, and less money would go to the parasites of Government Almighty, who take pride in protecting us from affordable goods! It’s that simple!

      1. Even if Canada spent billions to subsidize the jets they sell to Delta, whose money subsidized them? The Canadians! Why turn down cheaper jets – and probably cheaper airfare – when Canadians are paying for it? So BOEING can make more money? Fuck THEM!

  2. I agree with the article, but I’m not sure I get ‘which most Americans would consider a luxury’.

    These are planes Delta bought to replace the ancient DC-9s (they’re not called that, but that’s what they are) serving smaller towns and lighter routes, like, say, Detroit – Indianapolis and such. They will make air travel cheaper (and I gather they’re pretty nice inside, although I haven’t had a chance to ride in one yet.) Not exactly ‘luxury goods’.

    1. Most Americans fly once, maybe twice a year on average. They do a load of wash at least a couple times each week…

  3. The Commerce Department’s push had come at the request of Boeing, which claimed that Canada’s subsidies to Bombardier’s planes were unfair and caused great harm to America’s aircraft industry.

    You have to kind of admire Boeing’s shamelessness there.

  4. LG washers run $600 and way more than that. That tariff joins SALT as another shot at the mini-mansion Democrats who are buying them..

    1. So does Whirlpool and GE. The units they sell for less than $600 aren’t any different from the set my Gran had 30 years ago and I can fix Gran’s for under $100 and it’s likely to outlast all of them.

  5. That’s nice… But it’s only spit in the ocean as Trump enacts stupid tariffs like Solar panels, that wil kill the massive job growth in US Solar Installers (25% growth last year alone), kill off job and infrastructure expansion at factories like San Jose, CA’s Sunpower (they just announced their pullback) and Washing Machines.. Will kill Florida factories (according to an article today)… And as he destroys NAFTA and is looking at doing the same to our trade ageements with the Eurozone.. MAGA!

    Meanwhile, removing one restrictive policy could have helped Puerto Rico in the past, and definitely would reduce all of their costs in rebuilding right now.. and it also affects everything Hawaii ships in.. The Jones Act, which balances profits of our US shipping industry on the backs of consumers in Hawaii and Puerto Rico:

    Section 27 of the Merchant Marine Act is known as the Jones Act and deals with cabotage (coastwise trade) and requires that all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.

  6. Boeing had already won. The real goal was to stop Bombardier from assisting the Chinese in entering the airliner market. Guess Reason didn’t bother to do the requisite research. More effort needed to do real journalism.

    1. The real goal was to high-five a crony. It didn’t protect Boeing from squat. It would have made things worse for actual Americans, you know, people who buy airplane tickets.

  7. Protectionists live at your expense…

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