Washington, Ottawa clash in Bombardier trade fight

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Washington (AFP)

US trade officials are expected to confirm massive tariffs on Bombardier planes Tuesday in a case that has inflamed relations between Washington and Ottawa.

The trade dispute stems from a complaint by US aerospace giant Boeing against its Canadian rival that found a receptive ear in US President Donald Trump, whose "America First" agenda has vowed a tough line in matters of international commerce.

Boeing argues that Bombardier signed a deal to sell its new single-aisle CS 100 planes with a price tag of just $19.6 million each, far below the $33.2 million construction cost, and a pittance compared with the list price of $79.5 million -- though that amount is almost never paid.

Bombardier was able to underprice the jets due to $3 billion in unfair government subsidies, Boeing says.

Earlier this fall, the US Commerce Department sided with Boeing in a pair of preliminary decisions, proposing nearly 300 percent anti-dumping duties on the planes, which are under contract to Delta Air Lines.

A final ruling by Commerce could come as early as Tuesday. The US International Trade Commission then is expected to rule on the merits of the case in February, though it rarely differs from Commerce.

Bombardier calls Boeing's criticism unfounded, saying the US company's entire case has been overtaken by events.

In October, shortly after the preliminary tariffs were announced, Boeing archrival Airbus took a majority stake in the C-Series program, announcing that the planes would be built at the Airbus plant in Mobile, Alabama.

The case has been a thorn in US-Canadian diplomacy.

US Secretary of State Rex Tillerson will be in Ottawa on Tuesday for talks with his counterpart Chrystia Freeland. The meeting is focused on North Korea, but is expected to touch on commercial matters as well.

Tillerson also is expected to meet with Canada's Prime Minister Justin Trudeau, who has defended Bombardier.

Trudeau's government had planned to purchase 18 new Boeing Super Hornets to replace its aging F-18 fleet, but scrapped the deal following Boeing's complaint against Bombardier.

Boeing suffered another setback last week when Delta announced it was ordering 100 Airbus planes to renew its narrow-body fleet in a move that analysts viewed as a snub of Boeing over the case.