In October we learned of a major trade dispute between the US and Canada, or perhaps more specifically, between Boeing and Bombardier. Boeing had filed a complaint with the US Commerce Department, asserting that Bombardier was getting illegal subsidies from the Canadian government and dumping its product (specifically, the CSeries aircraft) into the US market. Delta has 75 of these aircraft on order, and clearly Boeing wasn’t happy about that, even though they don’t have a direct competitor for the plane.
The Trump administration sided with Boeing, and proposed a significant tariff on the plane, of up to 300%. Not surprisingly, Delta’s CEO said that his airline still planned to take delivery of the CSeries aircraft, and that they didn’t plan on paying the tariffs. What that will look like in practice remains to be seen, though (the latest rumor is that Aeromexico may be taking delivery of some of Delta’s CSeries aircraft in the short term).
I guess this shouldn’t come as much of a surprise, but it looks like Canada may be retaliating against the US when it comes to this trade dispute. Specifically, Boeing has lost an order from Canada for 18 Super Hornet fighter jets, which were supposed to go to the Royal Canadian Air Force. This deal was estimated to be worth up to 6.4 billion USD. Instead they plan to buy 28-30 used fighter jets from the Australian military.
Per the International Business Times:
The Canadian government announced in 2016 it would purchase 18 planes from Boeing. The new F/A-18 fighter jets would have been a temporary measure for Canada, to allow the country to meet its commitments to the North Atlantic Treaty Organization (NATO) and the North American Aerospace Defense Command (NORAD). RCAF currently operates an ageing fleet of CF-18 fighters, which is due for replacement sometime in the next decade.
Since the Australian fighter jets are almost as old as the current Canadian fleet, RCAF will reportedly need to buy some additional planes to use them for spare parts. That could explain why 28-30 of the older planes would be bought instead of 18 new ones. An official announcement is expected in the coming days.
That’s only fair enough, I suppose. I’ll be curious to see how this situation further develops.
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