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September 27, 2017, 09:49:41 AM EDT By
GILLIAN RICH,
Boeing ( BA )won the first round in its
tariff dispute with Canada's Bombardier ( BDRBF ) but the decision
could cost Boeing important military sales to key NATO allies.
The Commerce Department recommended late Tuesday that a
220% tariff be imposed on each Bombardier's C Series jet delivered to the U.S.
after Boeing accused the Canadian aerospace giant of receiving $3 billion
in government subsidies, giving it an unfair competitive advantage.
A second ruling is expected on Oct. 5 and could add to
the total tariff, which is already higher than the 160% duty Boeing suggested.
The subsidization of goods by foreign governments is
something that the Trump Administration takes very seriously, and we will
continue to evaluate and verify the accuracy of this preliminary determination,"
Commerce Secretary Wilbur Ross in a statement.
Boeing shares climbed 1.5% to 257.61 in morning trade on
the stock market
today as the broader averages rallied. The stock broke out of
a flat
base on Sept. 15 with a 246.59 buy point. Bombardier shares, which
trade over the counter in the U.S., rose 6.5%.
But this "America First" decision could hit
sales of Boeing military hardware to the U.K. as 4,200 Bombardier jobs in
Northern Ireland could be at risk over the decision.
"This is not the behavior we expect from Boeing and
it could indeed jeopardize our future relationship with them," British
Defence Secretary Michael Fallon told reporters in Belfast, according to Reuters .
British Prime Minister Theresa May said that she
was "bitterly disappointed" by the ruling after she had
personally asked for President Trump's help in the dispute, according to the
report.
The U.K. has a Boeing P-8 maritime surveillance
plane on order, along with a fleet of new Apache attack helicopters.
Canadian officials threatened to cancel a planned
purchase of 18
Boeing F/A-18 Super Hornet jets over the ruling. Officials also
pointed out that the C Series supported 23,000 jobs in the U.S. and the jet's
engine is made by United Technologies [ticker symb=UTX ] Pratt
& Whitney unit.
United Tech shares rose 0.8% to 115.60 in morning trade.
The views and opinions expressed herein are
the views and opinions of the author and do not necessarily reflect those of
Nasdaq, Inc.
Original post: nasdaq.com
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