UK Slams Tariffs On Bombardier: "This Is Not What We Expect From A Long-Term Partner"

It appears the Commerce Department"s preliminary ruling, issued late last night, to slap a 220% tariff on Canadian aircraft manufacturer Bombardier could trigger an all-out trade war between the UK and Canada (on one side) and the US (on the other) as public officials in the UK and Canada blasted the ruling and threatened retaliation should the sanctions, which still need to be approved by the US International Trade Commission, become permanent.

Earlier today, the Commerce Department ruled that Bombardier"s jets should face the levy because the company received anticompetitive government subsidies. The ruling comes after Boeing said the Bombardier C-Series jet would not exist without hundreds of millions of dollars in launch funding from the governments of Canada and Britain, or a $2.5 billion equity infusion from the province of Quebec and its largest pension fund in 2015. Boeing brought the complaint after Delta Air Lines agreed in April 2016 to purchase 75 C-Series jets, an order worth some $5 billion.

The preliminary ruling - which comes as the US, Canada and Mexico are holding their fourth meeting to renegotiate Nafta - has met with praise from Boeing, and criticism from virtually everybody else involved.

The UK, which does a brisk business with Boeing, is threatening to cut ties with the company if the decision against Bombardier is finalized. The reason? Bombardier has a large plant in Belfast, employing some 4,200 people in Northern Ireland, a region that the UK"s ruling conservative party relies on heavily for support. If Bombardier, which is already struggling, takes another hit, those people could lose their jobs, potentially threatening the conservatives" tenuous grip on power after losing their majority in snap elections over the summer, according to Reuters. 

UK Defense Minister Michael Fallon said in a TV interview today that the ruling could jeapordize Boeing"s business relationship with the UK government.

“This is not the behavior we expect from Boeing and it could indeed jeopardize our future relationship with them,” British Defence Secretary Michael Fallon told reporters in Belfast at a briefing in the historic Harland & Wolff shipyard, a few hundred yards from the Bombardier plant.

“Boeing has significant defense contracts with us and still expects to win further contracts. Boeing wants and we want a long term partnership but that has to be two way.”

“Boeing is an important investor in the United Kingdom and an important employer in the United Kingdom but we would prefer this kind of issue to be settled on a negotiated basis,” Fallon said.

“This is not the kind of behavior that we expect from a long-term partner and I’ve made that very clear to Boeing,” Fallon told reporters.

Britain recently ordered the Boeing P-8 maritime surveillance plane and a new fleet of Apache attack helicopters. Its armed forces have deployed Chinook helicopters, the C-17 transport plane and the E-3 Sentry airborne early warning and command post.

Meanwhile, British Business Secretary Greg Clark said on Wednesday he was confident he would be able to have the U.S. anti-subsidy complaint against Bombardier dismissed.

“We’ve been working very closely with the Canadian government to make it clear that this is a complaint that is unjustified,” Clark told Sky TV.

“What needs to happen now by the trade commission is that they look to see whether there has been any detriment to Boeing,” he added.

“There hasn’t been because this aircraft does not compete with Boeing so we’re confident that we will be able to demonstrate that and have this case dismissed.”

Threatening language aside, the Gaurdian points out that Boeing has substantial leverage should the UK act to curtail its business relationship with the defense contractor. Boeing employs or supports more than 10,000 jobs in the UK; any tit-for-tat retaliation could affect them.

Even the labor party, which isn"t politically dependent on Northern Ireland and thus has less of an incentive to care about the potential closure of a Bombardier plant there, has joined in the Boeing bashing. Labour leader Jeremy Corbyn has just told his party conference in Brighton that the tariffs imposed on Bombardier planes threaten “thousands of jobs”. He called on Prime Minister Theresa May to leverage her "special relationship" with the US to try and protect workers in Northern Ireland.

"Thousands of jobs are now at stake...a Prime minister is betting our economic future on a deregulated trade deal with the US might want to take a moment to explain how 220% tarifsf are going to boost our exports from this country."

Of course, once the ITC issues its ruling, the Trump administration will have the final say on tariffs. Will May"s relationship with the president be enough to save Bombardier? Or will Trump side with Boeing and spin the tariffs as a bid to protect US workers - throwing red meat to his base in the process?

What do you think?

UK Terror Threat Level Lowered To "Severe" As Police Tear Down Terrorist Cell

Four days after UK Prime Minister Theresa May announced on Tuesday the nation"s terror threat level was raised to the highest possible, "Critical" level in response to the Manchester suicide bombing which killed 22 people, and resulted in British troops being deployed on the streets of London for the first time in a decade, on Saturday Theresa May said Britain had lowered its security threat level to "severe" following a number of arrests and significant activity by police investigating the suicide bomb attack. As a result the British soldiers who were deployed earlier in the week to assist police, would be withdrawn from Britain"s streets from midnight on Monday.

Earlier in the day, police hunting the terrorist network behind the suspected suicide bomber, Salman Abedi, said they had made two further arrests overnight as they closed in on other possible cell members. May said this meant that the independent body which sets the threat level had decided it should be lowered from its highest rating "critical", which means an attack could be imminent, to "severe". As a result, the UK"s threat assessment has now been returned to the level it was at prior to the Manchester attack, with no imminent attacks expected, although as May also added an attack is still "highly likely".

"A significant amount of police activity has taken place over the last 24 hours and there are now 11 suspects in custody," May said. "The public should be clear about what this means. A threat level of severe means an attack is highly likely. The country should remain vigilant."

UK terror threat level reduced from CRITCAL to SEVERE. WATCH @Theresa_May statement HERE: pic.twitter.com/ZYqzv8wATD

— Darren McCaffrey (@DMcCaffreySKY) May 27, 2017

Elsewhere, Reuters reports, that UK police officers said they had used a controlled explosion to gain entry to an address in the north of the city where two men were detained on Saturday. Some hours later, police cordoned off a large area in the Moss Side area of south Manchester and houses were evacuated with a bomb disposal unit sent to the scene. A man working in a local shop, who declined to be named, told Reuters he saw three men being taken away from the address.

"As part of an ongoing search at a property in Moss Side an evacuation is currently being carried in the area," police said in a statement.

On Friday, Britain"s most senior counter-terrorism officer said police were confident that they had made "immense" progress and had apprehended a "large part of the network". However, extra armed officers will be on duty across the country with security stepped up at some 1,300 events over the long holiday weekend.

The scope of the response to the Manchester attack has been dramatic, with the Times newspaper reporting on Saturday that intelligence officers had identified 23,000 jihahist extremists living in Britain. Earlier this week a source with knowledge of the matter told Reuters the security services were managing 500 active operations involving some 3,000 people who were thought to pose a threat.

An armed police officer at Manchester Piccadilly railway station

A concern for the UK, and perhaps explaining the reduction of the threat level, is that over the weekend there are a number of high-profile events including soccer cup finals in London and Glasgow, and the Great Manchester Run. However, Assistant Commissioner Mark Rowley, the UK police chief for counter-terrorism, advised people to be vigilant but to "go out as you planned and enjoy yourselves".

Meanwhile, the traditional blowback to these kinds of events has emerged, with Greater Manchester Police Chief Constable saying there had been a rise in reported hate crimes, from an average of 28 to 56 incidents on Wednesday even as the police and politicians praised communities in Manchester for their reaction to the bombing.  "We can"t directly link these to the events of Monday night and are continuing to monitor the situation," he said.

Also on Friday, political campaigning for the June 8 national election which was suspended after the Manchester attack resumed with the bombing becoming a central feature. The opposition Labour Party, emboldened by a rise in opinion polls, argued that Britain"s foreign policy had increased the risk of attacks and criticized Conservative Prime Minister Theresa May for cutting spending on policing. May said Labour leader Jeremy Corbyn was saying Britain was to blame for the bombing.

"I want to make one thing very clear to Jeremy Corbyn and to you, and it is that there can never, ever be an excuse for terrorism," she said at the G-7 meeting in Sicily. A recent poll on Thursday put May"s Conservatives five points ahead of Labour suggesting a far tighter race than previously anticipated, sending the British pound tumbling..