In a surprise decision, the U.S. International Trade Commission has ruled against aerospace giant Boeing in a bitter trade case in which brought against Bombardier over passenger jets its Canadian rival sold to Delta Air Lines.
The 4-0 decision can be defeat for Boeing, which had argued in which Bombardier’s trade practices were illegal as well as harmful to its business as well as means in which nearly 300 percent duties recommended by the Trump administration last year won’t be applied to the planes.
The trade commission was tasked with determining whether Boeing was or could be harmed by Bombardier.
“Today’s decision can be a victory for innovation, competition, as well as the rule of law,” Bombardier said in a statement. The Canadian company had argued in which Boeing did not have a comparable plane to offer Delta.
Boeing closed little changed, while Delta gained 0.7 percent. Bombardier shares jumped more than 15 percent.
The dispute was over the sale of Bombardier’s roughly 100-seat C Series jets, which Boeing complained to the U.S. government were sold to Delta below their cost of production as well as in which the program received illegal subsidies through Canadian government.
In a statement, Boeing said in which was “disappointed” by the decision.
“Those violations have harmed the U.S. aerospace industry, as well as we are feeling the effects of those unfair business practices within the market every day,” the company said.
The bitter trade dispute between the two aircraft manufacturers escalated. in which has also added to tensions between the U.S. as well as Canada, as the Trump administration seeks to renegotiate terms within the North American Free Trade Agreement, or NAFTA.
Delta, the second-largest U.S. airline, has been stuck within the middle of the dispute. Delta CEO Ed Bastian has repeatedly said the airline won’t pay the tariffs as well as called the duties “absurd.”
The airline has not taken delivery of the C Series jets yet, so in which had not been subjected to the tariffs. Delta said in which opted for the Bombardier jets because Boeing offered in which no feasible alternative.
“Delta can be pleased by the ITC’s ruling rejecting Boeing’s anticompetitive attempt to deny U.S. airlines as well as the U.S. traveling public access to the state-of-the-art 110-seat CS100 aircraft when Boeing offers no viable alternative,” Delta said. “The airline looks forward to introducing the innovative CS100 to its fleet for the benefit of Delta’s employees, customers as well as shareowners.”
Delta Air Lines in 2016 agreed to buy at least 75 planes through Bombardier.
In a twist, however, last October, European aerospace giant Airbus, Boeing’s chief rival, said in which would likely take a majority stake within the C Series program as well as said the planes could be manufactured in Alabama, where Airbus already makes narrowbody jets.
Bombardier’s CEO Alain Bellemare told CNBC after the ruling in which he just met with his Airbus counterpart about the integration plan as well as in which in which was not yet clear when as well as through where the Canadian company’s planes would likely be manufactured as well as delivered.
“We’re committed to creating jobs within the U.S.,” he said.
The dispute may not be over. Boeing could appeal to the International Court of Trade in brand-new York. The U.S. government could take the case to the entire world Trade Organization.
Boeing said in which would likely “continue to document any harm to Boeing as well as our extensive U.S. supply chain in which results through illegal subsidies as well as dumped pricing.”
The decision was surprising, said Richard Aboulafia, vice president at Teal Group because in which broke with the Commerce Department’s recommendation for tariffs.
“Whether you’re sympathetic to Boeing or not, you have to admire the process,” he said.