US Dept of Commerce puts 220% tariff on Bombardier
businessinsider.com
businessinsider.com
Of course one could argue Boeing receives massive 'subsidies' from the US government in terms of pork-laden defence spending contracts. And other things, like incentives for various factories etc..
Airbus receives massive benefits from their network of R&D centres affiliated with Universities.
It's almost a farce to talk about aircraft manufacture as 'purely free trade' - its de-facto a partly nationalized industry everywhere.
There would be 0 large planes in the sky if governments were not involved.
In other news, Bombardier is a brand of beer in the U.K. And that headline was rather confusing until I got into the article.
Absolutely. Because there are NO private smaller plane building companies who would gladly design and build larger planes if the market asked for them. If the market itself was not deeply corrupted by massive government intervention...
To imagine that only an all-knowing and all-powerful Government can do such thing is a lack of imagination and putting too much trust into a type of organization that has been proven over and over again at worst monopolistic and corrupted and at best incompetent.
Zero of them.
There is $0 available for anyone wanting to spend billions of dollars developing risky technology for a market that does not exist.
Nuclear power came from the Manhattan project.
Jet engines.
Large aircraft.
GPS.
The Internet.
All of those come from defence spending and would not have come to fruition from private markets.
Your thesis is dismissed by the fact that there are zero large aircraft makers in the world that exist without having been created by - and - supported by governments.
If what you said is true: Airbus and the new Chinese aircraft company would have been made long ago by 'private investors'.
Even the sales cycle for large aircraft depends on the diplomatic corps of nations. Sales of large aircraft are often tied to other geopolitical issues.
Almost any example I can think of points to governments as a source of corruption and waste.
But maybe you know better.
Were their defense programs (which includes clients outside the US, one of the interesting aspects of this move on their part, as they still want to sell Canada military planes) subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit?
Of course, if it doesn't, why doesn't Lockheed build out a commercial division? Do the technologies for each application just diverge too far to make it an irresistible combo?
Probably similarly for flight control software, electronics etc.
Though I'm not sure how much transfer you would see now that the designs for commercial planes are so mature.
"subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit?"
They are not subsidizing commercial operations with money, commercial operations is not operating on a loss long term. One small example, having billions of defense income makes your debt much cheaper. If they even need debt. From working in an enterprise company it's common to move money around on a zero interest rate basis. One part needs a billion $ to develop something or for marketing? Done. Some years later it gives that money "back". Zero interest. It was amazing.
Also - government spending is often more predictable and long term and provides a solid operating basis upon which to do other things.
And of course is the R&D and know-how overlap, in addition to all of the other things.
"They are not subsidizing commercial operations with money"
"Getting cheaper debt means subsidization of one line of business from another."
There would be as many as the market demands
I disagree.
There are many, many industries wherein barriers to entry are far too significant for private capital to take the risks - moreover - especially in areas of innovation, some things would not exist.
The internet itself would not have existed without having first been developed by the military, and then by academia.
Were it not to have been built - what 'startup' in 1965 was going to spend 30 years developing protocols, selling 'it' (whatever 'it' was in terms of a product) to universities etc.
Think GPS. Who's going to invent this tech out of nothing, and pay for a satellite program (back in the day when it was obscenely expensive to put stuff in space) for a market that does not exist? What's the business plan in 1965 for a 'GPS startup'?
Aircraft is much the same way.
Europeans are not stupid - they have smart enough capital and R&D, but the only way Airbus got off the ground was by massive political intervention.
Same for Nuclear Energy and some other forms of energy development.
And all of this aside from the fact that so much advancement came out of WW2 (and other wars) - which is R&D that the industry receives as a free, externalized benefit.
What private company would ever be able to invest in R&D and especially in the necessary charging infrastructure?
Only a Government can have the resources and vision to create an electric car. Without Governments there would be 0 electric cars on the road.
It is a natural effect of the enormous power we confer to our governments through the taxes and the rule-making role we give them.
The effects are easily judged by comparing the customer satisfaction in a heavily regulated market like infrastructure, health-care or planes and a more competitive, privatized market like consumer electronics or entertainment.
Tesla would probably not exist without government subsidies.
Also - electric cars are just a pretty small/feasible evolution from regular ones, moreover, the barrier to entry is not outlandish. There's a 'known market' and we know how to build them.
Even the sales cycle for large aircraft depends on state actors.
Because it would be too expensive. We have no examples where private companies worked in parallel to build huge, expensive markets from the ground up. Like say the CAR market itself. Or the cell phone. Or the smartphone...
No, a Wise Government must come in and say "let there be market"...
Electric cars are much less capital-intensive than building multi-hundred seat planes. There's obviously a spectrum of difficulty here, but we can make the capital requirements easier to have products that otherwise might take 20 years to exist, rather than 2.
Tesla only exists thanks to the grace of a billionaire who didn't want to spend his money on a private island in Hawaii.
There are countless examples where human ingenuity and private entrepreneurship has found frugal solutions to complex problems but none where governments are involved.
I do agree that with huge waste you can do in 2 years what would take 20, but I am not sure the cost is always worth it. Especially because that cost on the long term is a corrupt market on the long term, unable to function without further government interventions.
Nobody is denying this.
Nobody is saying that 'the government is the only source of innovation or should be managing the economy'.
But there are many industries that would not exist without strategic involvement by state actors.
Again - there are no 'big aircraft makers' in the entire world that are not backed by governments.
What's good for the market is not automatically good for humans, despite what some people seem to think.
That's a $5 billion dollar order that may have just gone up in smoke:
Canadian Prime Minister Justin Trudeau threatening to scuttle the country's plans to buy $5 billion worth of F/A-18 Super Hornet fighter jets from Boeing
It would cost the Canadian government a lot of political capital to back down on this threat, so if the US is intent to apply an import tariff to the C-series I can absolutely see Canada cancelling the Super Hornet order.
The other issue is - we are in a bind. We're buying F18's because we're not going to go for the F35s, at least for now. And switching temporarily to another vendor would be impossible ... and our 'long term commitment' is usually to the US when it comes to fighter jets etc.. It would be pretty interesting for Canada to go 'European' for the next 40 years, it would damage our relationship with the US.
This is going to be big news in Canada and cause some ire, surely.
On the flip side, the Canadian government had already chosen the F-35 and then when the Liberal party became the majority they scrapped that deal.
People were claiming the F-35 deal couldn't be undone, but they did it. I wouldn't be surprised if they're willing to stick it to Boeing/DJT by scrapping the F/A-18 deal now too.
We are definitely not 'perfectly happy' - it 100% affects operational capabilities, including putting lives at risk - we operate without proper air support in some scenarios, finally the previous government faced the problem and bought some Chinooks (ironically from Boeing).
Trudeau is different only in tone from previous governments with respect to foreign engagement. In pragmatic reality our military involvements would be just the same.
Moreover - time is ticking severely on our F18's which are way-way past service windows.
As to the commenter above about F35's - it's very complicated, and our 'sticking to the f35' may have very well just been political. We never signed a deal, and never committed to a price - also - we still may buy them. Publicly pulling out of the deal means a number of local sub-contractors lose their contracts. Of course it's complicated though.
I am sure the Eurofighter consortium would be happy to take an order for some Typhoons tho'...
Sweden has a Gripen I'm sure they would love to sell.
Then again, I really have no idea -- perhaps there are so few commonalities between an F/A-18 and an F-35 that it's just as easy to switch to another vendor.
What's the advantage?
Hand over significant authority to an unelected body, for what now?
There is no advantage, unless you're receiving subsidies.
We already have a trade deal with Europe, something the EU doesn't even want to offer the UK apparently.
That's strange, I'm sure I remember voting in EU elections.
I mean, that's just off the top of my head.
Nobody thinks the EU is perfect and it can improve in many ways, but your lies don't convince anyone of anything.
Especially in the viciously undemocratic manner in which it is organized.
This plant employs 4,500 people.
The Economist has a good overview of this fight:
https://www.economist.com/news/business/21729469-row-between...
There will be the argument that with supposed friends like the USA trying to screw Northern Ireland like this, then what chance does the UK have for a decent trade deal outside the E?
That said, it does sound high risk.
This is, I think, a kind of negotiating tactic.
But this is generally not how trade negos work - I think that this is the Trump Admin's version of hardball.
US gov is big and diverse, and once it's appealed, the body making the ruling may not be part of Trump's apparatus directly and may have something more level-headed to say about all this.