Trump walks back threat to ban Bombardier sales in United States
MONTREAL — U.S. President Donald Trump has backed down on a threat to ban Bombardier Inc. 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.
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 responded it pays more than US$2.5 billion 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 US$50-million investment in the site.
America enjoys a US$109-billion aerospace and defence trade surplus with the world, according to the U.S. Aerospace Industries Association.
Bombardier does the final assembly of its Challenger and Global business jets in Canada, while more than half of its revenue stems from U.S. 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 or about 4.5 per cent to close at $325.32 on Tuesday.
Most Bombardier planes feature at least 40 per cent U.S. content, analysts say. Over half of the value of the ultra-long-range Global 7500 luxury jet derives from American parts.
— The Canadian Press