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New Tariff

Summary

With U.S.-Canada relations unusually tense due to NAFTA renegotiations, the Trump administration has potentially taken a further step to weaken the historic bond between the two nations. An integral part of Trump’s campaign promises hinged on reshaping the dynamic of our trade interactions in order to protect American jobs, and he has found an opportunity with the Canadian owned plane manufacturing company, Bombardier. Bombardier’s C-series jet is set to be delivered to its U.S. customer Delta in the Spring of 2018. A trade case brought against Bombardier by U.S. competitor Boeing proved to be a rare opportunity for Trump to follow through on a campaign promise. The U.S. International Trade Commission (USITC) determined that there is a reasonable case to be made against Bombardier, which meant that the dispute was advanced to the Department of Commerce. The decision was made that Bombardier has received subsidies or is selling at below cost to undercut American manufacturing, which resulted in an import tariff of 220% being levied against the Canadian company.

Analysis

While the intent of Trump’s protectionist policies has been primarily to promote American job growth, this tariff could endanger what Bombardier estimates are 22,000 jobs in Kansas and West Virginia, both states which supported Trump in the election. In addition, this could create an uncharacteristic division between the United States and Canada, as well as, to a lesser extent, Northern Ireland, who both are relying on the boost in employment the manufacturing of the C-series will create. This grievance is a further addition to a previous dispute regarding Trump’s plan to restore tariffs against Canadian lumber companies, which were ended with the initial NAFTA agreement. The Bombardier tariff may be a plan to gain leverage for the U.S. in future NAFTA negotiations, but it could also be an insult to two countries who view themselves as close allies rather than competitors with the United States.

Engagement Resources

  • Support Atlas Free Trade: Atlas Free Trade is an organization established by the Atlas Network and tasked with encouraging research and advocacy on behalf of lowering trade barriers. You can volunteer which will allow you to keep in touch in regards to events being held around the world.
  • Donate to the Center for Global Development (CGD): The CGD is a nonpartisan think tank focused on reducing worldwide poverty, partially be opening trade laws. You can donate here.

This brief was compiled by Colin Shanley. If you have comments or want to add the name of your organization to this brief please contact colin@usresistnews.org.


 

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