Congress to Trump: Thousands of Jobs Will Be Lost if Canadian Bombardier Taxed

Bombardier CL-600 C-GGJA Air Canada on final approach at YOW
iStock.com/brightmotion

A Bipartisan Letter Appeals to Trump to Consider the Consequences of Slapping Tariffs on Canada

A bipartisan letter sent to President Donald Trump warned that thousands of jobs could be lost if the president pursued tariffs against Canadian company Bombardier, Inc. (TSE:BBD.B) in order to protect the American aerospace industry.

The initial proposal for tariffs to be imposed was a result of a request from Boeing Co (NYSE:BA) after Bombardier announced that it would be getting into the jetliner business, bringing a competitor to market against the “737.” But lawmakers were quick to point out that a reactionary tariff could have dire consequences for the American economy.

The letter states that as many as 2,000 American jobs and $14.0 billion could be lost if tariffs are put in place against Bombardier, as the company has operations in over a dozen states across the U.S.

“We recognize that Boeing’s aircraft development and production activities are extremely important to U.S. leadership in the world’s aerospace economy,” read the letter to Trump. “Through your leadership, we believe that the U.S. government can help to resolve these cases in a manner that preserves the significant economic contribution and continued economic growth provided to the United States by both these fine companies.”

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The bipartisan letter was received by Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer, National Economic Council Chair Gary Cohn, and International Trade Commission’s Rhonda Schmidtlein.

“In the United States, Bombardier’s manufacturing operations, along with its purchases from U.S.-based suppliers, generate significant employment and economic benefits,” read the letter.

It went to further espouse the benefits of Bombardier’s “C Series” aircraft, which the letter claims generate “significant economic contributions to the U.S. economy.” More than 50% of each aircraft’s content is sourced from U.S.-based suppliers, the letter goes on, and that the manufacturing process supports more than 22,700 direct, indirect, and induced U.S. jobs over the entirety of the program.

But Trump has long been one to favor protectionism and tariffs when it comes to trade policy. A recent transcript came to light where the president was seen demanding more tariffs and expressed his irritation that too little had been done in terms of imposing tariffs.

Trump has also been vocal on his plans to renegotiate and potentially end NAFTA, the trade agreement that allows goods to travel largely tariff-free between the U.S. and Canada, its second-largest trading partner.

 

Sources

Trump warned: Taxing Canada would ‘bomb’ US jobs,” Washington Examiner, September 5, 2017.

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