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Boeing forgoes tax breaks in Airbus trade dispute

Wing autoclave
A giant autoclave is ready to “cook” parts for the Boeing 777X wings. (Credit: Boeing)

With Boeing’s blessing, Washington state lawmakers have introduced bills aimed at suspending tax breaks that have benefited the aerospace company to the tune of millions of dollars annually.

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Boeing and Embraer forge $4.75B jet venture

Boeing and Embraer jets
The Boeing-Embraer deal would add regional jets such as Embraer’s E190-E2 to a lineup that also includes Boeing’s 737 MAX 7 and larger jets. (Embraer Illustration)

After months of negotiations, Boeing and Brazilian jetmaker Embraer today announced a tentative agreement to form a $4.75 billion joint venture that would bring Embraer’s small-size commercial aircraft operations firmly into Boeing’s fold.

The arrangement is a strategic parry to last year’s move by Boeing’s European archrival, Airbus, to partner with Canada’s Bombardier on small-size jets.

Embraer’s engineering expertise could also come into play as Boeing gears up to design and produce a new breed of midsize jet variously known as the New Mid-Market Airplane, NMA or 797.

“This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,” Dennis Muilenburg, Boeing’s chairman, president and CEO, said today in a news release.

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WTO ruling opens the way for tariffs (or talks)

Airbus A380 jumbo jet
European loan programs for developing Airbus’ A380 jumbo jet were among the issues addressed in a ruling from the World Trade Organization. (Airbus / e*m Photo / H. Gousse)

The World Trade Organization today issued its final report in a long-running dispute over subsidies for Airbus jets, potentially clearing the way for the U.S. to levy harsh tariffs on European imports.

It’s more likely, however, that U.S. and European officials will bear down on negotiations over complaints that also touch on the Boeing Co.’s tax breaks from Washington state.

Today’s WTO appellate panel ruling determined that Airbus received improper loan subsidies from European governments to launch its A350 and A380 jets. Similar claims, relating to the A320 and A330 lines, were dismissed.

In a statement, U.S. Trade Representative Robert Lighthizer said the ruling “confirms once and for all that the EU has long ignored WTO rules.”

“Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products,” Lighthizer said.

Boeing CEO Dennis Muilenburg said the ruling affirmed his company’s complaints. “Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated,” he said in a statement.

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China hits back on tariffs, and Boeing weighs in

Air China 737
The first 737 MAX 8 jet delivered to Air China takes off from Boeing’s Seattle Delivery Center. (Boeing Photo / Craig Larsen)

China took less than 24 hours to respond to proposed U.S. tariffs with a 106-item list of its own that could affect $50 billion worth of U.S. imports, potentially including some of Boeing’s 737 airplanes.

The impact on Boeing isn’t yet clear, and the tit-for-tat trade sanctions on aerospace goods have not yet been implemented. Hours after China announced its move, Boeing issued a statement voicing hope that Washington and Beijing will be able to avoid a trade war.

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U.S. proposes tariffs on $50B in Chinese imports

Donald Trump
President Donald Trump speaks at Marine Corps Air Station Miramar during a visit last month. (DOD Photo)

The Office of the U.S. Trade Representative today rolled out a list of $50 billion worth of Chinese-made goods that could be hit by import tariffs, marking the latest volley in what some fear could turn into a trade war.

The items range from components for spacecraft and aircraft, to robots and other industrial tools, to pharmaceuticals and medical supplies, to television sets, dishwashers and even sewing machine needles.

The 45-page, 1,300-item list was developed as a response to what the Trump administration says are China’s efforts to take unfair advantage of technologies and intellectual property developed in the U.S. Listed items could be subject to an added import duty of 25 percent.

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U.S. trade panel bats down Bombardier jet tariff

Bombardier jet
Sales of Bombardier’s CS100 jet won’t be hit by tariffs after all. (Bombardier Photo / Patrick Cardinal)

Canadian airplane maker Bombardier scored an unexpected victory today over Boeing when the U.S. International Trade Commission unanimously rejected a plan to levy a 292 percent tariff on the company’s U.S. sales.

In a statement, the commission said it determined that U.S. industry “is not materially injured or threatened with material injury” by imports of Bombardier’s 100- to 150-seat CSeries jets.

That runs counter to Boeing’s claim that Bombardier’s Canadian government subsidies would threaten its sales of 737 jets. The U.S. Commerce Department sided with Boeing and called for the tariff, but it was up to the ITC to approve the penalty.

The decision suggests that Bombardier’s multibillion-dollar sale of up to 125 single-aisle CS100 jets to Delta Air Lines, announced last April, will go forward.

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Boeing-Embraer talks add a twist to trade battle

Embraer jet
Embraer’s E195-E2 jet competes with Bombardier’s CS100. (Embraer Photo)

Boeing and Embraer, a Brazilian regional-jet manufacturer, today confirmed that they’re discussing a “potential combination” in the wake of a Wall Street Journal report suggesting that Boeing was looking into acquiring the company,

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Boeing vs. Bombardier battle enters next phase

The U.S. Commerce Department says its tariffs on imported Canadian jets will add up to 292.21 percent, marking another escalation in a trade battle involving Boeing and Canada’s Bombardier.

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Airbus-Bombardier deal complicates jet dispute

Airbus and Bombardier jets
An artist’s conception puts Bombardier’s CS100 jet alongside Airbus’ A320neo. (Airbus Illustration)

Airbus added a twist to a U.S.-Canada trade dispute by announcing a plan to partner up with Bombardier, the Boeing Co.’s Canadian rival.

The plan calls for Airbus to take on a majority stake in Bombardier’s C Series line of passenger jets, which is due to be hit by U.S. tariffs of nearly 300 percent.

Europe-based Airbus will own 50.01 percent of the C Series limited partnership, leaving Bombardier with about 31 percent and Investissement Quebec with 19 percent. The partnership’s headquarters and primary assembly line will remain in Quebec, but Airbus said it would expand C Series production to its manufacturing site in Alabama.

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U.S. officials slap 220% tariff on Canadian jets

Delta Bombardier jet
An artist’s conception shows Bombardier’s CS100 jet in Delta Air Lines’ livery. (Delta Illustration)

The U.S. Commerce Department today issued a preliminary finding that Canada’s Bombardier aircraft company was getting unfair subsidies for its CSeries jets — and laid out a plan that would more than triple the cost of the jets being bought by Delta Air Lines.

As a result of the ruling, the importers of Canadian civil aircraft with a capacity of 100 to 150 seats would have to pay a 219.63 percent tariff.

The ruling sides with Boeing, which filed a petition complaining that Bombardier’s sale of 75 CS100 jets to Delta was being subsidized by the governments of Canada as well as Britain. Bombardier is based in Montreal, but its wings are built in Northern Ireland.

“The U.S. values its relationships with Canada, but even our closest allies must play by the rules,” Commerce Secretary Wilbur Ross said in a statement. “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.”

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