On 28 April 2016, recorded a firm order from Delta Air Lines for 75 CSeries CS100s plus 50 options. On 27 April 2017, The Boeing Company filed a petition for dumping them at $19.6m each, below their $33.2m production cost. On the same day, both Bombardier and the government of Canada rejected Boeing's claim, vowing to mount a "vigorous defence".
On 9 June 2017, the US International Trade Commission (USITC) found that the US industry could be threatened and should be protected. On 26 September, after lobbying by Boeing, the US Department of Commerce (DoC) alleged subsidies of 220% and intended to collect deposits accordingly, plus a preliminary 80% anti-dumping duty, resulting in a duty of 300%. The DoC announced its final ruling, a total duty of 292%, on 20 December, hailing it as an affirmation of the "America First" policy. In October, with financial issues already mounting, Bombardier was indirectly forced by the US government tariffs to relinquish 50.01% of its stake in the CSeries program to Airbus for a symbolic CAD$1, and would produce CSeries aircraft in the United States.
On 10 January 2018, Canada formally filed a complaint at the World Trade Organization (WTO) against the United States over the affair. On 26 January, the four USITC commissioners unanimously reversed their earlier claims, finding that US industry is no longer threatened and no duty orders will be issued, overturning the imposed duties. The Commission public report was made available by February 2018. On March 22, Boeing declined to appeal the ruling.
Initial sale
On 28 April 2016, Bombardier Aerospace and Delta Air Lines announced a sale for 75 CSeries CS100 firm orders and 50 options, the first aircraft should enter service in spring 2018. Delta Air Lines, it was thought, would likely start using more fuel-efficient CS100s in 2018 on flights out of Los Angeles, New York and Dallas. Airways News believe that a substantial 65 to 70% discount off the $71.8 million list price was provided making the final sale at $24.6–28.7 million price per aircraft; this large order from a major carrier could help Bombardier to break the Boeing/Airbus duopoly on narrowbody aircraft.
Dumping petition
On 27 April 2017, Boeing filed a petition charging Bombardier with dumping for selling 75+50 CS100s to Delta Air Lines for $19.6m each, below their $33.2m production cost. Aviation Week & Space Technology noted "The reaction to Boeing's petition against Bombardier across much of the aerospace industry has been sharply negative". FlightGlobal qualified the move as "perhaps the most back-handed compliment one manufacturer can pay another". Delta Air Lines dismissed Boeing's allegations, claiming Boeing only offered a combination of used Embraer E-190 and Boeing 717s which were unavailable for the Delta timeline as Boeing does not currently produce a model in the 100-125 seat range, not the Boeing 737-700 or 737 MAX 7. Boeing itself received multibillion-dollar tax breaks from Washington state. The Canadian Press compared the situation to David and Goliath.
At the 18 May United States International Trade Commission hearing, Boeing's vice-chairman Ray Conner stated "It will only take one or two lost sales involving US customers before commercial viability of the Max 7, and therefore the US industry's very future, becomes very doubtful" and "Bombardier has said it wants 50% of this market, which it will probably win at the prices it is offering. If Bombardier does that, we're looking at losing $330 million dollars in revenue every year". Bombardier Commercial Aircraft president Fred Cromer said "the Boeing numbers are not accurate, whether we're talking about the sales price or the production cost,[...] early airplanes are expensive [to produce] and every manufacturer looks at the entire program" and the pricing to Delta was in the context of relaunching the program at the 2015 Paris Air Show and had to account for the "perceived risk" of ordering a new aircraft.
Boeing offered United Airlines very low prices for the Boeing 737-700 to undercut Bombardier, affecting the pricing of the MAX 7 and cascading on the rest of the Boeing 737 MAX family. That was a threat to the company's future and ultimately the US aerospace industry, according to Boeing. While the CS100 seats 110 in two-class, Bombardier responded to the 100-seat requirement by pricing it as a light two-class 100-seater and charging for 10 more seats as needed. Bombardier was surprised when United ordered the larger 737-700 as the competition was believed to be the Embraer E190, possibly tied to other Boeing 777-300ER or Boeing 787 deals.
Initial findings
On 9 June, the US Trade Commission voted that there is a reasonable indication that the US industry is threatened and will publish its report after 10 July 2017. The US Department of Commerce will continue to conduct its investigations, with its preliminary countervailing duty determination due on 21 July 2017, and its antidumping duty determination due on 4 October 2017. Its detailed decision is heavily redacted, not allowing an observer to understand the ITC reasoning.
As the US Department of Commerce should announce eventual measures against Bombardier on 25 September 2017, Spirit Airlines and Sun Country Airlines presented their support of the CSeries, benefiting US travelers while Boeing does not offer any 100-140 seat aircraft.
Preliminary duties
On 26 September, the Department of Commerce announced it found that Bombardier received subsidies of 220%, and will collect deposits based on these preliminary rates. Bombardier said it will be disputing the "absurd" ruling which is "divorced from the reality about the financing of multibillion-dollar aircraft programmes".
On 6 October 2017 the US Department of Commerce announced it would add an 80% preliminary anti-dumping duty on top, resulting in a total duty of 300%. On 1 February 2018, the US International Trade Commission will issue its final subsidy and dumping determinations which will support tariffs ultimately imposed by the US government's Commerce department on 8 February. Delta Air Lines is confident Bombardier will be eventually exonerated.
University of Waterloo's Danny Lam suggest Boeing's trade complaint real reason is the potential expansion of China's aviation industry through Bombardier. Delta Air Lines CEO Ed Bastian said "we do not expect to pay any tariffs and we do expect to take the planes", maybe with a delay, but he had "various other plans and alternatives".
Reactions
Canada
Boeing's actions may affect the planned sale of Boeing F/A-18E/F Super Hornet jet fighters to the Royal Canadian Air Force, warned Prime Minister Justin Trudeau in a statement in mid September. "We won't do business with a company that's busy ... trying to put our aerospace workers out of business". Canadian Defence Minister Harjit Sajjan confirmed on 28 September 2017 that Boeing's products are unlikely to be selected because it is not a "trusted partner". "Our government is not going to allow our aerospace sector to be attacked in this manner ... We can't do business with a company that treats us in this way." Canada will review Boeing's bid when it is presented.
On 12 October, Boeing replied that its illegal-subsidies complaint against Bombardier is about selling aircraft below the cost of production and not an attempt to hurt a competitor, the company merely wants "fairness" in "following trade rules" as Boeing claims to be already doing. In meetings with Donald Trump, Trudeau warned: "The attempt by Boeing to put tens of thousands of aerospace workers out of work across Canada is not something we look on positively and I certainly mentioned that this was a block to us ... making any military procurements from Boeing".
Canada will run a competition for 88 new fighters to replace its current 77 CF-18s at a cost of C$15 to C$19 billion. The competitors are expected to include Airbus Defence and Space, Boeing, Dassault Aviation and Lockheed Martin. The government scrapped its plans to buy 18 new Super Hornets as an interim measure on 12 December 2017 and will instead buy 18 second-hand Australian F/A-18s for an estimated C$500 million (US$388 million). The Canadian government made clear that Boeing will not be considered a trusted partner unless it drops its CSeries trade challenge.
United Kingdom
Bombardier, via its subsidiary Short Brothers, is a major employer in Belfast, Northern Ireland. The UK's Prime Minister Theresa May announced that her government would work with the company to protect the 4,000 "vital" jobs. British Defence Secretary Michael Fallon said "We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters and they will also be bidding for other defence work and this kind of behaviour clearly could jeopardise our future relationship." Boeing UK is also a major employer in the UK.
May hinted that the UK might cease ordering aircraft from Boeing unless the punitive tariff against Bombardier is dropped. The UK government's orders for helicopters and patrol aircraft are already firm and Boeing will refuse to back down to prevent "subsidized competition" and "illegal dumping" by Bombardier which would hurt Boeing for many years. The Republic of Ireland's Taoiseach Leo Varadkar warned that the Commerce Department's tariff may result in a UK-US trade war. On October 11, Barry Gardiner of the UK Labour Party accused Boeing of hypocrisy, insisting that all aircraft manufacturers require government subsidies; he labeled Boeing "the king of corporate welfare" and a "subsidy junkie" and suggested it was trying to "crush a competitor". Bombardier manufacturing in Northern Ireland employs indirectly 11,000 people.
European Union
Boeing was prepared for the possibility of losing military sales from the Canadian and UK reactions, but was surprised that Airbus took a majority stake in the program, which could cause EU retaliation, leading to the US possibly backing down. In its original April complaint, Boeing notes that "Airbus has opened a final assembly facility in Mobile, AL [...] to produce Aircraft in the United States [and is] treated as a domestic Aircraft producer".
Airbus-Bombardier partnership
On 16 October 2017, Airbus and Bombardier announced a partnership on the CSeries program, with Airbus acquiring a 50.01% majority stake, Bombardier keeping 31% and Investissement Québec 19%, headquarters and assembly remain in Québec while US customers would benefit from a second Final Assembly Line in Mobile, Alabama. Airbus, Bombardier Bombardier CEO Alain Bellemare said "When you produce an aircraft in the US, it is not subject to an import duty under US rules [...] We are not circumventing anything". Boeing thinks this would not exempt the aircraft from potential tariffs.
In some 13 November filings, Delta insists its order is not an actual sale and no aircraft would be imported due to the aircraft being built in the US, while Bombardier argues that its deal with Airbus should be left outside the investigation, as is Boeing, which also claims the Mobile site's only goal is to circumvent duties, and if tariffs are dropped it will never materialize. In a 20 November filing, Delta said "In Boeing's view, any action would be a potential form of 'evasion'", like modifying a purchase agreement, evaluating 109-seat aircraft not produced in US or expanding the US aerospace industry and competition for customers.
Depending on the outcome of the US ITC ruling in early 2018, the CSeries aircraft earmarked for Delta in 2018 could be delivered to other customers. Bombardier will carry out the preparatory work to start the second final assembly line once the partnership is approved. This construction would take two years and result in early 2020 deliveries. The US content already exceeds 50% without the final assembly and is close to 60% with it included.