Tariffs, Bombardier and the dangers of dealing with Trump
05 October 2017
The recent dispute over the US slapping a 219% tariff on Bombardier made aircraft hit the headlines recently and will doubtless bubble away in the background for months to come.
Essentially the argument is that Bombardier, a Canadian company with a plant in Belfast amongst others around the world, has received bailouts and subsidies to the tune of £750 million in Quebec and £135 million in Belfast. Boeing considers that this has enabled Bombardier to undercut them, and therefore a tariff is needed to redress this imbalance.
As the Financial Times has reported, this is not completely unusual. The argument between the US and Canada over an industry that by its nature has always been dependent on government support of one form or other, is not the key issue.
What should be taken as a stark warning is the aggressive approach Trump’s administration is taking to trade disputes as part of its “America first” policy. Since the administration took office it has already started almost 50% more of these sorts of cases compared to the previous year. The US is on a war footing, throwing its weight around and threatening disputes not just on the high profile tensions with China on steel and technology transfer, but even on olives. When a government dives into trade disputes on pizza toppings, you know it’s not interested in a cooperative approach to trade.
In previous such disputes, as part of the EU, the UK was in a position to exercise collective clout and could get more leverage over the US. Outside of the EU we will be on our own and a much more junior partner.
At the moment we have no way of knowing what pressure might be being put on May, Davis, Johnson and Fox through such bullying threats on trade, because of the huge secrecy around trade policy. We need much more openness and accountability on trade to ensure decisions are being made in the public interest.