Boeing versus Bombardier: Conflict over Tariffs

Bombardier Inc., a Canadian manufacturer of business jets and small aircraft, developed the C Series aircraft amid numerous technical and financial challenges. In 2016, the US aviation company Delta Air Lines Inc. made a large purchase of the plane at an allegedly highly discounted price, which was expected to help Bombardier Inc. enter the lucrative US aviation market. In response, The Boeing Company, the world’s largest aerospace company, filed a complaint about the deal with the US Department of Commerce and with the United States International Trade Commission. The complaint was consistent with the current US administration position of promoting protectionist economic and trade policies. The US Department of Commerce concurred with The Boeing Company and levied anti-dumping and countervailing duties of 292.21 per cent against Bombardier Inc. However, the United States International Trade Commission found the tariffs unjustified and overturned the decision on the grounds that The Boeing Company was not materially harmed by the transaction. The Boeing Company had multiple options for pursuing a challenge, but each option had potential consequences.

This case is suitable for undergraduate- and graduate-level courses in strategic management that discuss how companies compete against each other. It is also suited to courses on international trade and business on the topic of international trade regulations and dynamics. Students in geopolitics and global political economy courses will find the case useful for understanding the role that geopolitics plays in shaping the competitive landscape for businesses in terms of globalization. This case raises aspects of globalization for discussion, as well as the complications that can arise during international trade conflict. Students learn about mechanisms for raising and resolving international trade disputes, geopolitical relationships, and business decisions made by multinational corporations. After working through the case and assignment questions, students will be able to<ul><li>understand the complexities associated with manufacturing and selling products across international markets;</li><li> explain the regulatory framework for redress of disputes in international trade;</li><li>review the business and geopolitical implications of operating in a globalized world; and</li><li> appreciate the need to balance a company’s immediate commercial benefits with strategic gains in an international market and align that need with the host country’s geopolitical objectives.</li></ul>

• anti-dumping duty
• countervalining duty
• geopolitics
• international trade
• competition
• aerospace