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Theresa May criticised after Bombardier jets hit by huge US trade tariff - business live Theresa May criticised after Bombardier jets hit by huge US trade tariff - business live
(35 minutes later)
12.33pm BST
12:33
Here are some photos of Bombardier staff working on Series aeroplane wings:
12.30pm BST
12:30
Henry McDonald
Back in Belfast, a member of the Northern Ireland Assembly has revealed he has family members employed at the Bombardier plant in East Belfast, and that he fears for their future job prospects.
Chris Lyttle of the cross community Alliance Party is an East Belfast representative in the deadlocked Stormont Assembly. Lyttle said:
“This was an astounding ruling but it is important to remember it is only preliminary. The US International Trade Commission must now find as Boeing did not compete for the Delta contract awarded to Bombardier C Series and does not serve this market, no injury has occurred.
“I have constituents, friends and family employed by Bombardier and I am acutely aware of the concern that exists amongst staff. Alliance has already engaged on this issue with the most senior levels of the UK, US and Canadian Governments and we will continue to do so, to work to achieve a fair outcome and protect the thousands of jobs in our aerospace manufacturing sector and economy.
“This ruling could have severe implication not only for jobs in NI but for international trade with the United States, particularly in the aerospace sector.
12.20pm BST
12:20
Business secretary: We'll work 'hand in glove' with Canada
The UK government is turning up the pressure on Boeing.
Business secretary Greg Clark says that the US planemaker’s complaint against Bombardier is simply “unjustified”, and vowed to work with Canada to reverse last night’s preliminary ruling.
We will work completely hand in glove with the Canadian government to get this overturned.
Clark also believes that the final ruling in this dispute, due next year, should be in Bombardier’s favour.
The Trade Commission needs to look to see if there’s been any detriment to Boeing.. There hasn’t been, as this aircraft doesn’t compete with Boeing.
12.04pm BST
12:04
11.58am BST11.58am BST
11:5811:58
Labour MP Conor McGinn, who was born and brought up in Northern Ireland, says the Bombardier dispute shows that Britain is stronger within the European Union.Labour MP Conor McGinn, who was born and brought up in Northern Ireland, says the Bombardier dispute shows that Britain is stronger within the European Union.
“Hard Brexit campaigners in Government keep promising that Britain will get a great new trade deal with the US after we leave the EU. That’s how they justify their ideological choice to leave the Single Market and Customs Union.“Hard Brexit campaigners in Government keep promising that Britain will get a great new trade deal with the US after we leave the EU. That’s how they justify their ideological choice to leave the Single Market and Customs Union.
“But now we see the US Government taking a decision which is totally against our economic interests and could put thousands of jobs at risk across the UK, especially in Northern Ireland.“But now we see the US Government taking a decision which is totally against our economic interests and could put thousands of jobs at risk across the UK, especially in Northern Ireland.
“We can’t rely on a good trade deal with the US being agreed after Brexit. To protect jobs and our economy, we need to stay in the Single Market and Customs Union to preserve trade with our largest market – the EU.”“We can’t rely on a good trade deal with the US being agreed after Brexit. To protect jobs and our economy, we need to stay in the Single Market and Customs Union to preserve trade with our largest market – the EU.”
11.58am BST11.58am BST
11:5811:58
Paul Adams, head of aerospace at management consultancy, Vendigital, reckons that the Bombardier-Boeing dispute will take some time to resolve:Paul Adams, head of aerospace at management consultancy, Vendigital, reckons that the Bombardier-Boeing dispute will take some time to resolve:
“Boeing’s legal challenge may in part be influenced by Trump’s ‘America First’ policy. The US manufacturer could be seeking to test the new administration’s resolve when it comes to protecting US jobs against foreign competitors selling to US customers.“Boeing’s legal challenge may in part be influenced by Trump’s ‘America First’ policy. The US manufacturer could be seeking to test the new administration’s resolve when it comes to protecting US jobs against foreign competitors selling to US customers.
“As history shows, trade disputes in the aerospace sector can become protracted - the Boeing / Airbus dispute ultimately had to be resolved by the World Trade Organisation. It is likely that Bombardier will appeal the US court’s decision, before the final hearing in 2018.“As history shows, trade disputes in the aerospace sector can become protracted - the Boeing / Airbus dispute ultimately had to be resolved by the World Trade Organisation. It is likely that Bombardier will appeal the US court’s decision, before the final hearing in 2018.
11.43am BST11.43am BST
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Manufacturing Northern Ireland, a trade body, have blasted the US tariff decision -- and warned that Britain could be more exposed to such rulings after it leaves the EU:Manufacturing Northern Ireland, a trade body, have blasted the US tariff decision -- and warned that Britain could be more exposed to such rulings after it leaves the EU:
.@ManufacturingNI says @CommerceGov ruling on @Bombardier is "nonsense" + an "opportunistic punt." Says it doesn't bode well for Brexit pic.twitter.com/uEgFRhh9sB.@ManufacturingNI says @CommerceGov ruling on @Bombardier is "nonsense" + an "opportunistic punt." Says it doesn't bode well for Brexit pic.twitter.com/uEgFRhh9sB
11.30am BST11.30am BST
11:3011:30
In other news: UK retail sales have grown at their fastest pace in two years this.In other news: UK retail sales have grown at their fastest pace in two years this.
That’s according to the latest CBI Distributive Trades Survey, which suggests consumers are still spending despite rising inflation and weak wages. It’s a volatile survey, though, so....That’s according to the latest CBI Distributive Trades Survey, which suggests consumers are still spending despite rising inflation and weak wages. It’s a volatile survey, though, so....
CBI retail sales balance hit a two year high in Sep. Truth is it's a pretty erratic indicator though... pic.twitter.com/htHerBrQk0CBI retail sales balance hit a two year high in Sep. Truth is it's a pretty erratic indicator though... pic.twitter.com/htHerBrQk0
11.17am BST11.17am BST
11:1711:17
The DUP’s Sir Jeffrey Donaldson has repeated his warning that Boeing could be hit by retaliatory sanctions.The DUP’s Sir Jeffrey Donaldson has repeated his warning that Boeing could be hit by retaliatory sanctions.
Donaldson, who is the party’s chief whip, tells Sky News:Donaldson, who is the party’s chief whip, tells Sky News:
Boeing do sell a lot of aircraft to the UK, and to Canada, and to other countries. The US government has to weigh that in the balance as well.Boeing do sell a lot of aircraft to the UK, and to Canada, and to other countries. The US government has to weigh that in the balance as well.
We think there is still a strong case to be made for Bombardier, and believe that common sense will prevail in the end.We think there is still a strong case to be made for Bombardier, and believe that common sense will prevail in the end.
Q: So you would support tit-for-tat sanctions?Q: So you would support tit-for-tat sanctions?
Canada has made clear that they will impose import restrictions against Boeing, Donaldson replies. It’s too early to say what the UK should do, he adds.Canada has made clear that they will impose import restrictions against Boeing, Donaldson replies. It’s too early to say what the UK should do, he adds.
He also disputes the suggestion that the row has anything to do with Brexit, pointing out that Britain is still in the EU today.He also disputes the suggestion that the row has anything to do with Brexit, pointing out that Britain is still in the EU today.
I can’t believe that the US president wants to take an entirely protectionist approach against its closely ally, Donaldson adds.I can’t believe that the US president wants to take an entirely protectionist approach against its closely ally, Donaldson adds.
Q: What at the implication if this preliminary decision is upheld? Q: What are the implications for Northern Ireland if this preliminary decision is upheld?
It would be a “devastating blow” to Bombardier if they were priced out of the US market, and we would struggle to keep the jobs in Belfast, Donaldson warned.It would be a “devastating blow” to Bombardier if they were priced out of the US market, and we would struggle to keep the jobs in Belfast, Donaldson warned.
Updated
at 12.09pm BST
11.11am BST11.11am BST
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Labour’s shadow industrial strategy minister, Chi Onwurah, has also heavily criticised Theresa May over the Bombardier tariff ruling.Labour’s shadow industrial strategy minister, Chi Onwurah, has also heavily criticised Theresa May over the Bombardier tariff ruling.
Onwurah told Sky News:Onwurah told Sky News:
It’s a damning indictment of the criminal negligence and complacency of Theresa May and her government, and a sign of their entire lack of international negotiating skills which bodes really badly for our post-Brexit negotiations.It’s a damning indictment of the criminal negligence and complacency of Theresa May and her government, and a sign of their entire lack of international negotiating skills which bodes really badly for our post-Brexit negotiations.
11.01am BST11.01am BST
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Bombardier bonds tumble after tariff rulingBombardier bonds tumble after tariff ruling
Worryingly, the value of Bombardier’s corporate bonds has fallen this morning.Worryingly, the value of Bombardier’s corporate bonds has fallen this morning.
That means traders believe the risk that the Canadian firm defaults on its debts has risen.That means traders believe the risk that the Canadian firm defaults on its debts has risen.
Bloomberg has the details:Bloomberg has the details:
Bombardier Inc.’s euro-denominated bonds maturing in 2021 have declined the most in more than two years after the U.S. imposed import duties of 220 percent on the company’s C-series plane, threatening to upend deliveries of more than $5 billion to Delta Air Lines Inc. next year.Bombardier Inc.’s euro-denominated bonds maturing in 2021 have declined the most in more than two years after the U.S. imposed import duties of 220 percent on the company’s C-series plane, threatening to upend deliveries of more than $5 billion to Delta Air Lines Inc. next year.
The Canadian aircraft and train manufacturer’s senior unsecured notes are currently down by more than seven price points at 99.963, according to Bloomberg prices at 10am London time. The notes had already fallen 2.2 points on Tuesday -- the same day that competitors Siemens AG and Alstrom SA agreed to join their rail businesses.The Canadian aircraft and train manufacturer’s senior unsecured notes are currently down by more than seven price points at 99.963, according to Bloomberg prices at 10am London time. The notes had already fallen 2.2 points on Tuesday -- the same day that competitors Siemens AG and Alstrom SA agreed to join their rail businesses.
Bombardier bonds tumble as U.S. slaps import duties on C-Series https://t.co/YCk9a5EuVk via @aragaomarianna pic.twitter.com/ZaSPLIUsEKBombardier bonds tumble as U.S. slaps import duties on C-Series https://t.co/YCk9a5EuVk via @aragaomarianna pic.twitter.com/ZaSPLIUsEK
That bond has been one of the top 10 most actively traded in the European secondary bond market, according to MarketAxess subsidiary, Trax.That bond has been one of the top 10 most actively traded in the European secondary bond market, according to MarketAxess subsidiary, Trax.
11.00am BST
11:00
Labour leader Jeremy Corbyn may comment on the Bombardier news when he addresses the Labour Party conference at noon today.
Corbyn expected to criticise Government directly on Bombardier re lack of influence over Trump, risk to jobs
10.44am BST
10:44
Liberal Dem Leader Vince Cable has accused America of ‘protectionist bullying’ over the Bombardier ruling.
He is urged Theresa May to stand alongside Canada’s government in refusing to accept the new tariffs lying down.
Cable says:
“Rather than simply expressing ‘bitter disappointment’, our government should be out there fighting for vital British manufacturing jobs in Belfast.
May must support Trudeau’s administration in standing up to protectionist bullying from Donald Trump and his crude ‘America First’ philosophy.
Do we really believe the US will save us from Brexit with a comprehensive trade deal, when this is how they deal with fair and free international competition?”
10.21am BST
10:21
Bombardier workers stunned by huge tariff
Henry McDonald
Workers at the Bombardier aerospace factory in Northern Ireland have admitted they are shocked and stunned by America’s decision.
The news that a tariff of 220% will be imposed on Bombardier’s jet sales to Delta airlines has come a a big blow to the workforce, who make wings for the C Series planes.
Geordie Burnside, a shop steward, says the size of the tariff - effectively tripling the cost of the C Series jet - has taken everyone by surprise.
Burnside, who has worked at the factory for 26 years, told the Guardian that:
“I’ve been getting phone calls from early morning asking why the ruling had slapped down such an enormous tariff. They cannot believe the enormity of it or get their heads around it. There have been a lot of tough times at this factory over the last 26 years and we got through. I hope that the company will appeal and the battle isn’t over yet.
Burnside also warned that the decision has big ramifications for Northern Ireland’s economy:
“There are highly skilled jobs inside this plant which is the biggest manufacturer in Northern Ireland. Thousands of other people’s jobs outside of Bombardier depend on this company too. There are a lot of worried people out there not only in Northern Ireland but the Republic and Britain who supply into Bombardier. It’s a very worrying time.”
10.08am BST
10:08
The US commerce department has upheld Boeing’s claim that Bombardier was able to offer its C-Series planes to US airline Delta for a vastly reduced price because of illegal states subsidies from Canada and the UK, violating global trade rules.
Under international rules, unfair subsidies from governments can take the form of grants, loans, equity injections, tax breaks and production contributions, if they give a company or an industry an unfair competitive advantage over foreign rivals.
In this case, Boeing claims that a US$1bn (£750m) bailout of Bombardier by the provincial Quebec government in Canada in 2015 unfairly enabled the firm to sell its C-Series aircraft in the US at below cost price.
The claim also relates to the Northern Ireland Executive and the UK government, which pledged to invest £135m in a new factory in Belfast where the wings for the C-Series planes are manufactured.
10.08am BST
10:08
Bombardier dispute explained:
The Press Association have written a handy Q&A on the trade dispute between Bombardier and Boeing.
What is the row about?
It centres on US-based Boeing’s allegations that Canadian-headquartered Bombardier received state subsidies allowing it to sell its C-Series planes at below-market prices in America.
The DoC has carried out its own investigation and said it had made a preliminary determination that imports should be subject to a 219.63% import tariff, although it will continue to evaluate the figure.
If the tariff is imposed when deliveries of the aircraft begin it will increase the cost of selling into one of the world’s most important aviation markets.
Bombardier is contracted to supply up to 125 C-Series aircraft to Atlanta-based Delta Airlines in a deal underpinning many staff posts at its manufacturing plant in Belfast. The UK Government has been actively lobbying in the US for a compromise between Boeing and Bombardier amid growing concern about the potential implications for Bombardier’s Northern Ireland operations.
What are the aerospace companies saying about it?
Boeing submitted a petition with the US International Trade Commission and the Department of Commerce in April which claimed large government subsidies helped Bombardier launch an aggressive campaign to “dump” its C-Series aircraft in the US.
It said there was a shared industry interest in a level playing field. Bombardier has repeatedly rejected Boeing’s claims, accusing its rival of pure hypocrisy after it alleged anti-competition practices in the sale of aircraft. The manufacturer described the DoC’s interim determination as “absurd” and “divorced from the reality about the financing of multi-billion-dollar aircraft programmes”.
What are the implications for Belfast?
Bombardier had been under financial pressure and invested large sums in its new jet programme, which is crucial to many jobs in the city.
Last year the firm announced 1,080 job losses at its Northern Ireland plants following delays to the C-Series.
It is one of the country’s largest employers, with around 4,500 on the books. According to the GMB union it supports nearly 10,000 further jobs through its suppliers.
What is the Government doing about it?
Political powersharing at Stormont has been in cold storage for months. However the DUP’s 10 anti-Brexit MPs are a crucial force propping up the Government in key votes after Theresa May lost her majority in this year’s General Election.
DUP leader Arlene Foster’s influence has seen the Prime Minister lobbying US President Donald Trump during a recent visit to New York.
Following the DoC’s announcement the UK Government said it would “continue to strongly defend UK interests” and labelled Boeing’s position as “unjustified”.
9.55am BST
09:55
More from Labour’s shadows secretary of state for Northern Ireland:
Why did Theresa May refuse to echo Justin Trudeau's promise to cuts contracts with #Boeing if they pursued action against #Bombardier ?
The Bombardier crisis also shows why we need an executive back in Belfast. The Tories can't be relied on to stand up for Northern Ireland.
Northern Ireland’s devolved government collapsed in January, and the region’s political parties haven’t yet agreed a new power-sharing setup.
The CBI, which represents Britain’s business leaders, has warned that this deadlock is hurting the economy.
Angela McGowan, CBI Northern Ireland Director, says:
“Bombardier makes a huge contribution to the Northern Irish economy. They are a major regional employer and support a wider supply chain that stretches across Northern Ireland.
“The decision by the US Department of Commerce represents a challenge to the Northern Ireland economy and places an important driver of regional economic growth at risk.
“This just reinforces the need for the swift return of an inclusive devolved government. Government and business must work in partnership to deliver a new far-reaching industrial strategy to improve regional resilience, economic competitiveness and facilitate growth.
“With jobs and future prosperity in the region being put at risk by decisions made far away from Belfast, we need a devolved government that can speak up for and champion the needs of the local workers and businesses most affected.”
9.37am BST
09:37
The BBC’s Simon Jack has done a good blogpost explaining the issues around the Boeing-Bombardier case.
In it, he points out that Boeing has received plenty of money from the US government over the years. Can it really complain about other companies getting subsidies with a straight face?!
The deal with Delta to supply up to 125 planes was the largest order yet for its big hope, the C-Series, but an order only made possible, say Boeing, by absurdly low pricing made possible by Canadian and UK government subsidies.
While it is true that Bombardier has received billions from the government of Quebec and the state’s pension fund, Boeing has received more, a lot more, from the US military, Nasa and the State of Washington over many decades.
Boeing would argue these were commercial arrangements, others would call them padded contracts amounting to subsidies.
Jack adds that Theresa May is in a bind. She needs Northern Ireland’s DUP to back her in parliament, but she can’t really afford to upset a major employer like Boeing either....
Boeing issued a polite but firm reminder to Theresa May that it employs 16,500 people in its UK supply chain and last week broke ground on a new facility in Sheffield.
The Prime Minister may find it difficult to keep her new best friends in the DUP sweet while not offending such an important employer in the rest of the UK.
Picking sides in the Bombardier trade dispute is not as easy as it looks. Blog https://t.co/jKX90uGrhL
9.23am BST
09:23
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9.20am BST
09:20
Owen Smith: May was 'complacent' and 'criminally negligent'
Labour MP Owen Smith, shadow secretary of state for Northern Ireland, has heavily criticised Theresa May’s government.
He says they were ‘criminally negligent’ for not persuading the US to reject Boeing’s claim.
Smith also points out that the decision suggests cracking a new trade deal with America after Brexit will be tough:
Mrs May & the Tories have been criminally negligent in failing to force withdrawal of this action by Boeing https://t.co/OcRaBCwbAB?ssr=true
UK officials told journalists last week that they were 'quietly confident' Boeing would lose the #Bombardier case. Complacency costs jobs.
And try telling Bombardier workers this morning that post Brexit we'll be striking 'easy' free trade agreements with the US!
Conservative MP Anna Soubry, a vocal opponent of Brexit, has also tweeted about the ruling:
US Court ruling #Bombardier #Belfast is not only wrong but shows all trade deals require a loss of so called "sovereignty"
Honoured & impressed to visit #Bombardier #Belfast C class wing factory as Bis Minister confident @Number10gov will fight #Boeing ruling
Updated
at 9.47am BST
9.09am BST
09:09
Unions are blaming Theresa May for not persuading Donald Trump to reject Boeing’s claim.
Ross Murdoch, of the GMB union,says the PM was:
“asleep at the wheel when she could and should have been fighting to protect these workers. It’s high time she woke up”.
What does the US tariff on Bombardier tell us about the May-Trump relationship?She asked him to intervene but... https://t.co/RhU36Z3MhI pic.twitter.com/1pqW7Q33cr