MONTREAL (Reuters) – The Canadian province of Quebec and Britain threatened retaliation on Wednesday over stiff U.S. tariffs imposed on Bombardier Inc’s (BBDb.TO) CSeries jet that could affect thousands of jobs in the two countries.
The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties of 220 percent on the jets, which could effectively shut Bombardier out of the U.S. market if upheld, after rival Boeing Co (BA.N) launched a trade challenge accusing Canada of unfairly subsidizing the aircraft.
The tariffs create “a level playing field in the aerospace market,” said another rival, Brazil’s Embraer (EMBR3.SA), which welcomed the move.
The duties, which came on the same day Bombardier was left out of a rail tie-up, sent its shares and bond prices lower. The shares initially fell 14 percent before regaining ground to trade down 8.4 percent in mid-afternoon. Many of its junk-rated bonds were lower, according to MarketAxess data.
“This puts a cloud over the company with regard to the CSeries,” said Bryden Teich, portfolio manager at Avenue Investment Management. “As long as there’s this uncertainty, it will affect the share price.”
Bombardier is a major employer in Quebec, where Prime Minister Justin Trudeau’s Liberals say they need to win extra seats in an election set for October 2019.
Quebec Premier Philippe Couillard called on Ottawa to ensure that “not a bolt, not a part, not a plane from Boeing” be allowed into Canada until the dispute had been resolved.
“Boeing may have won a battle but, let me tell you, the war is far from over. And we will win,” Couillard told reporters, describing the duties as an attack.
In Ottawa, Trudeau said the government was “disappointed and I will continue to fight for good Canadian jobs.”
He has previously said Canada will not go ahead with plans to buy 18 Boeing F-18 Super Hornet fighter jets unless the challenge is dropped.
Canadian Trade Minister Francois-Philippe Champagne described it as a deplorable decision and one which shows that Boeing is not a “trustworthy partner.”
“Our message to the Americans is to tell them that this decision will also have an impact on American suppliers and jobs in the United States,” he added.
‘ENOUGH IS ENOUGH’
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