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U.S. President Donald Trump has backed down on a threat to ban Bombardier plane sales in the United States, allowing the aerospace sector to breathe a sigh of relief after tempers flared and tariffs rose in an escalation of the trade war last month.
Speaking at a campaign rally Monday night, Trump said he’s changed his perception of the Montreal-based business jet maker as a purely Canadian manufacturer.
“I’m going to be helping a certain air company get themselves straightened away,” he told a crowd in a suburb of Wichita, Kan., where Bombardier employs 1,500 workers.
“I always viewed them as a Canadian company … but now I find out they have a presence here, and we’re not hurting them if they’re in Kansas. So we’ll take care of those people, all right? And the jobs.”
Wichita serves as the home base of Bombardier’s defence division. The company employs about 3,500 American workers across plants in Kansas, Texas, California and other states.
U.S. President Donald Trump said in a social media post Monday that Montreal-based jet maker Bombardier would no longer be allowed to sell in the United States unless it started manufacturing there, even though the company does have a manufacturing footprint in the country.
Republican stronghold Kansas now a battleground
Kansans are already feeling first-hand the effects of the president’s policies. Midwestern farmers have seen the diesel that powers their tractors and combines rise to near-record prices due to the Iran war. Kansas has now turned into a political battleground as Republicans and Democrats fight for control of the typically red state ahead of next month’s midterm elections.
Trump said Monday that a phone call from Kansas Republican Sen. Roger Marshall helped convince him to walk back his threat against Bombardier. Polls show Marshall is running neck and neck with Adam Hamilton, a Democrat in a state that has not elected one to the Senate since 1932.
Last month, Trump suggested he would bar Bombardier aircraft sales in the United States unless it moved its operations there, despite the harm experts said such a move would inflict on American workers.
“NO MORE SELLING BOMBARDIER IN THE UNITED STATES!” he posted on social media on Sept. 7. “If they want our Market, they must build here, and stop treating America like a ‘piggybank.”‘
Bombardier spells out U.S. commitment
Bombardier responded that it pays more than $2.5 billion US to some 2,800 American suppliers across 47 states each year, indirectly supporting tens of thousands of jobs.
“The American aerospace industry is a clear winner on trade and exports,” Bombardier stated in September, adopting the language of the president and his fixation on triumph and trade surpluses.
Last week, the company inaugurated a skills development centre for new aircraft technicians and mechanics in Wichita, part of a $50-million US investment in the site.
“Our recently announced investments and newly inaugurated North American Learning Center will support high-skilled jobs for many years to come,” a spokesperson for Bombardier said Tuesday in a statement to CBC News. “We are proud of our engaged workforce in Wichita as well as in all 20-plus states [where] Bombardier employs team members.”
America enjoys a $109-billion US aerospace and defence trade surplus with the world, according to the U.S. Aerospace Industries Association.
Asked about U.S. President Donald Trump’s threat that Bombardier’s planes shouldn’t be sold in the U.S., Secretary of State for Defence Procurement Stephen Fuhr said the Montreal-based jet maker is important for both countries and ’employs tens of thousands of people in the United States.’
Bombardier does the final assembly of its Challenger and Global business jets in Canada, while more than half of its revenue stems from American customers.
“We view the removal of this regulatory uncertainty as positive for sentiment as it alleviates an important headline overhang for investors,” said James McGarragle, an analyst at RBC Dominion Securities.
Trump’s threat did not have a “tangible impact” on demand for the luxury jets among American customers over the past six weeks, he added.
Bombardier shares rose $13.85 US or about 4.5 per cent to close at $325.32 US on Tuesday.
Despite U.S. tariffs on steel, aluminum and other goods, aerospace manufacturing remains deeply integrated across the continent and beyond.
Most Bombardier planes feature at least 40 per cent U.S. content, analysts say. More than half of the value of the ultra-long-range Global 7500 luxury jet derives from American parts.
Blocking a major manufacturer from the market would “undoubtedly” cause revenue and job losses at American parts producers, said National Bank analyst Cameron Doerksen last month.
A ban would have also been “massively disruptive” to the many American jet fleet operators awaiting Bombardier deliveries, he said.
Trump’s fist-shaking went down a day before Ottawa’s retaliatory tariffs on American goods took effect on Sept. 8, a response to the 50 per cent duties Washington imposed on Canadian goods in August.
Trump then proceeded to ban most Canadian alcoholic drinks, some dairy products and motorcycles, among other products, and slapped a 50 per cent levy on more items.
Trump’s September Truth Social post marked the second time this year Bombardier has come into the president’s crosshairs.
In January, he singled out Bombardier in a threat to ground all Canadian-made aircraft and slap them with a 50 per cent tariff unless Ottawa approved Gulfstream business jets — assembled in Savannah, Ga. — marking an earlier escalation of trade tensions between the two countries.
