Canada scraps plan to buy Boeing fighters amid trade dispute

Canada scraps plan to buy Boeing fighters amid trade dispute

Government and industry sources said the Australia deal will be announced as early as next week, with the Royal Canadian Air Force needing 28 to 30 used F/A-18 fighter jets to meet its worldwide commitments.

A Royal Australian Air Force F/A-18 Hornet conducts a Close Air fly over.

News of the expected delay comes as the government is moving ahead on the purchase of used fighter jets from Australia instead of brand-new Super Hornets from Boeing to temporarily bolster Canada's CF-18 fleet.

The move underlines Ottawa's anger at a decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier Inc (BBDb.TO), which the USA giant accuses of dumping airliners on the American market.

The Canadian government then confirmed on 29 September it submitted an expression of interest, formally marking Canada's interest in the Australian equipment.

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Boeing complained to the US government that Bombardier was receiving subsidies, which in turn allowed it to sell its C-Series civilian passenger aircraft at below-market prices.

Investors Business Daily notes that the move appears to be motivated by a 300 percent tariff Washington slapped on sales of Canadian Bombardier Series C jets. RCAF now operates an ageing fleet of CF-18 fighters, which is due for replacement sometime in the next decade.

Bombardier denies any wrongdoing and says Boeing can not prove it was harmed by the Canadian company's actions because it did not offer Delta any planes of its own. Prime Minister Justin Trudeau said at the time the country would not engage in business with Boeing till such time its dispute with Bombardier continued, a sentiment he repeated to President Donald Trump in October. They would supplement Canada's existing CF-18 fleet until a new aircraft could be acquired. That legal process continues with final rulings expected by the U.S. International Trade Commission early next year. It would be a deeply unfortunate outcome.

But the company's thinly-veiled threat may be futile, especially in a larger political climate where Canada and Mexico are frustrated by Trump's attempts to renegotiate long-standing trade deals. "Unfortunately, I think they're taking advantage of a [political] context that's favorable to them".

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