Bombardier duties threaten to heat up tensions in NAFTA talks

The Trump administration's decision to hammer Bombardier with a 220 per cent tariff on its CSeries jets is threatening to crank up tensions in the renegotiation of the North American free-trade agreement and devolve into a blow-for-blow battle between Canada and its largest trading partner.

Commerce Secretary Wilbur Ross announced preliminary countervailing duties late Tuesday. They are ostensibly meant to protect Boeing, which accuses Bombardier of being unfairly subsidized by the Canadian, Quebec and British governments. But Mr. Ross's tariff rate goes far beyond the 80 per cent duties Boeing requested.

Some observers read the move as a bid to gain leverage at the NAFTA table, but warned that it could toughen Canada's resolve on the already-thorny matter of the Chapter 19 dispute resolution provision.

The Trudeau government on Wednesday doubled down on its threat to retaliate by shredding a plan to buy Boeing Super Hornet fighter jets...

Mr. Bown [senior fellow at the Peterson Institute for International Economics, a Washington-based thinktank] said Mr. Trump is probably hoping the dispute gives the U.S. leverage in NAFTA talks, allowing them to hold out the option of a resolution in exchange for concessions at the bargaining table...

This was excerpted from 27 September 2017 edition of The Globe and Mail.