What Does the Bombardier Dispute Mean for International Business?

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With the US company Boeing imposing a 220% import tariff on the UK branch of Bombardier, and bitter accusations on both sides, Galvin International explore what the dispute means for the world of international business.

What is the dispute?

Tensions between the UK and the United States have emerged after the US sided with Boeing in their dispute with the Canadian aircraft manufacturer Bombardier. Bombardier, which employs 4,000 people in Northern Ireland, had a 220% import levy imposed on sales of its C-Series jets to the US airline Delta.

The tariffs were imposed in response to Boeing’s claim that Bombardier benefit from unfair and anti-competitive state support and subsidies from both the UK and the regional government of Quebec.

The dispute, which could threaten the jobs of thousands of Bombardier’s Northern Irish staff, remains unresolved – the UK has warned Boeing could lose its UK defence contracts, while the US has stood by its decision and raised tariffs further.

What is the wider impact?

For the moment, the world of international trade should be largely unaffected by the dispute. Although Boeing are not a direct competitor in this particular sector of aircraft manufacturing, it is not unusual that they will, like all companies, attempt to disadvantage potential competitors wherever possible.

However, the dispute could have other, more long-term impacts. In particular, US companies may find themselves emboldened by President Trump’s stance on the dispute, as a clear demonstration of the protectionist America First campaign promised by him during the election. With a green light to drive hard bargains from Trump’s administration, the US is unlikely to give any country, even the UK, an easy ride when it comes to doing business abroad.

Although many believed that the UK could rely on a warm trading relationship with the US following Brexit, indications of a tougher stance can also be seen in the US siding against the UK and EU with regards to agricultural import quotas. The Trump administration joined several other countries in openly objecting to a deal between the UK and EU to divide existing agricultural import quotas under World Trade Organisation regulations – a deal which was hoped by the UK government to be accepted as a major step forwards in negotiations.

The dispute, and its more far-ranging implications, demonstrate the importance of having a global body such as the World Trade Organisation, that can regulate international trade and rule decisively on disputed cases. If the UK were to sever ties with the EU without any agreement of a transitional period agreed, it would fall back under WTO regulatory guidelines – proving just how crucial the existence of such a body is.

How can Galvin International help?

In uncertain times for international business, it’s important to have the right guidance and support on hand. Galvin International’s team of experts untangle the complexities of international expansion and work with your business to develop and implement custom strategies.

Get in touch to find out how we can help your company achieve its goals of global growth.

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