US trade body backs Canada's Bombardier over Boeing in tariff spat

Canada's Bombardier Inc on Friday won an unexpected trade victory against U.S. planemaker Boeing Co as a U.S. agency rejected imposing hefty duties on sales of Bombardier's new CSeries jet to American carriers.

Shares of Bombardier, which relies financially on sales of the jet, rose 15 percent. Boeing shares fell slightly.

The US International Trade Commission voted 4-0 to reject Boeing's claims that it suffered injury by Bombardier underpricing the CSeries in the US market and discarded a Commerce Department recommendation to slap a near 300-percent duty on sales of the 110-to-130-seat jets for five years.

The ITC had widely been expected to side with Chicago-based Boeing, the world's largest maker of jetliners, which accused Bombardier of dumping the planes, or selling them below cost, in the US market.

The ITC, which currently has four commissioners, did not give an explanation on Friday for its decision.

A victory

In a statement, Bombardier called the decision a "victory for innovation, competition, and the rule of law," and a win for US airlines and the traveling public.

Boeing said it was disappointed that commission did not recognize "the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the US small single-aisle airplane market."

Through a venture with European plane maker Airbus SE , which has agreed to take a majority stake in the CSeries this year, Bombardier plans to assemble CSeries jets in Alabama to be sold to US carriers starting in 2019.

The case has sparked trade tensions between the United States and its allies Canada and the UK. Ottawa last year scrapped plans to buy 18 Super Hornet fighter jets from Boeing.

Former ITC chairman Dan Pearson praised the decision by phone.

"Not a single commissioner was willing to buy Boeing's arguments," he said. "I think 'America First' is a policy of the White House and the Commerce Department," he said. "But it's not the policy of an independent agency (like the ITC)."