
US Dept of Commerce puts 220% tariff on Bombardier - alexasmyths
http://www.businessinsider.com/boeing-commerce-department-bombardier-tariff-219-trade-war-2017-9
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alexasmyths
As background: the Quebec government bought $1B worth of the 'C Series
program' (in terms of share value, who knows what that means, and it's a murky
thing), which is the primary source of concern I believe.

Of course one could argue Boeing receives massive 'subsidies' from the US
government in terms of pork-laden defence spending contracts. And other
things, like incentives for various factories etc..

Airbus receives massive benefits from their network of R&D centres affiliated
with Universities.

It's almost a farce to talk about aircraft manufacture as 'purely free trade'
\- its de-facto a partly nationalized industry everywhere.

There would be 0 large planes in the sky if governments were not involved.

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majormajor
> Of course one could argue Boeing receives massive 'subsidies' from the US
> government in terms of pork-laden defence spending contracts.

Were their defense programs (which includes clients outside the US, one of the
interesting aspects of this move on their part, as they still want to sell
Canada military planes) subsidizing their commercial operations, why would
they not simply shut the commercial side down and keep more of that sweet,
sweet, defense money as pure profit?

Of course, if it _doesn 't_, why doesn't Lockheed build out a commercial
division? Do the technologies for each application just diverge too far to
make it an irresistible combo?

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_Codemonkeyism
Why throw good money away?

"subsidizing their commercial operations, why would they not simply shut the
commercial side down and keep more of that sweet, sweet, defense money as pure
profit?"

They are not subsidizing commercial operations with money, commercial
operations is not operating on a loss long term. One small example, having
billions of defense income makes your debt much cheaper. If they even need
debt. From working in an enterprise company it's common to move money around
on a zero interest rate basis. One part needs a billion $ to develop something
or for marketing? Done. Some years later it gives that money "back". Zero
interest. It was amazing.

~~~
alexasmyths
Getting cheaper debt means subsidization of one line of business from another.

Also - government spending is often more predictable and long term and
provides a solid operating basis upon which to do other things.

And of course is the R&D and know-how overlap, in addition to all of the other
things.

~~~
_Codemonkeyism
I'm not getting your argument

"They are not subsidizing commercial operations with money"

"Getting cheaper debt means subsidization of one line of business from
another."

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kogepathic
I hope Boeing has done their napkin math correctly, because the Canadian
government has threatened to cancel their Super Hornet purchase over this
dispute.

That's a $5 billion dollar order that may have just gone up in smoke:

 _Canadian Prime Minister Justin Trudeau threatening to scuttle the country 's
plans to buy $5 billion worth of F/A-18 Super Hornet fighter jets from Boeing_

It would cost the Canadian government a lot of political capital to back down
on this threat, so if the US is intent to apply an import tariff to the
C-series I can absolutely see Canada cancelling the Super Hornet order.

~~~
alexasmyths
As a Canadian, I wish that were true, but our gov does not ever play hard
ball. We fully play the nice guy routine. There's no face-saving for us. I'm
even surprised they made the threat.

The other issue is - we are in a bind. We're buying F18's because we're not
going to go for the F35s, at least for now. And switching temporarily to
another vendor would be impossible ... and our 'long term commitment' is
usually to the US when it comes to fighter jets etc.. It would be pretty
interesting for Canada to go 'European' for the next 40 years, it would damage
our relationship with the US.

This is going to be big news in Canada and cause some ire, surely.

~~~
slededit
Canada is perfectly happy to not have functioning hardware for extended
periods of time. Especially now that it has entered a far more isolationist
stance under Trudeau (in terms of military involvement).

~~~
gaius
It's funny, most people in the rest of the world don't even think Canada has a
military. What do the Mounties need with F18s?

I am sure the Eurofighter consortium would be happy to take an order for some
Typhoons tho'...

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rconti
It seems like it would be an insanely huge task to start doing military
contracts with a new supplier, get new parts, train servicemembers how to
maintain the new planes, and deal with countless pieces of support equipment
and infrastructure and software designed for one plane.

Then again, I really have no idea -- perhaps there are so few commonalities
between an F/A-18 and an F-35 that it's just as easy to switch to another
vendor.

~~~
gaius
There are barely any commonalities between F35 variants despite what was
promised, it's another debacle of that programme.

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booblik
Does Delta have to “import” the airplanes? As an airline, can’t they pretend
the planes are based elsewhere, and just fly inside the States? Must be a
loophole here somewhere.

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slededit
Foreign carriers aren't allowed to fly domestic routes but must have an
international connection.

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thephyber
I remember hearing something identical to this about ships: The Jones Act [1]
which requires all ships moving from US port to US port must be mostly US
owned and mostly US crewed.

[1] [https://transportationinstitute.org/jones-
act/](https://transportationinstitute.org/jones-act/)

~~~
jon_richards
Indian states often do this for intra-state trucking.

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PhasmaFelis
"Bombardier" seems like an unfortunate brand name for commercial aircraft.

