Australia could be the beneficiary of a growing trade dispute between Canada and the USA. The Trump administration is threatening to place heavy 300 percent import duties on Canadian aircraft manufacturer Bombardier because US manufacturer Boeing says the Canadians receive unfair government assistance.
Canada has responded by saying it will not buy US fighter aircraft, but will instead buy second hand planes from other countries. Defence industry Minister Christopher Pyne has confirmed that the Australian government has received a request from Canada to buy Australia’s F/A-18 Hornet fleet, which will be replaced in the next decade by the new but controversial F-35 Joint Strike Fighters.
The West Australian newspaper has reported that Mr Pyne is amenable and plans to visit Canada early next year to discuss that deal and possible Canadian involvement in Australia’s upcoming Future Frigate project.
Australia has over 70 Hornets, which are to be replaced by a similar number of F-35s over the next ten years. Both machines are manufactured by McDonnell Douglas.
Australia’s Hornets entered service in 1984. They were upgraded in the late 1990s, and two squadrons of the newer F/A-18F Super Hornets have been added since 2009. Canada has over 100 Hornets of various models and wants more.
The F-35 has been plagued by delays and cost overruns. In 2016 Canada announced that it was reviewing its F-35 order and would look at new Super Hornets in the interim. Now that is on hold as Canada reviews its options in light of the potential trade war with the USA.
Bombardier, based in Montréal, is one of the world’s leading suppliers of smaller and mid-range passenger aircraft, with Brazil’s Embraer also a major player. Both manufacturers are now moving into larger planes, as is China’s Comac, threatening the Boeing-Airbus passenger jet duopoly.
Bombardier (pronounced bom-bard-ee-ay in the French fashion) has signed a deal with Airbus under which the European company will buy a majority stake in the Bombardier subsidiary building the new 160 seat C series passenger jet.
Airbus has said it will build the C series planes at its factory in Mobile, Alabama to avoid import duties. But Boeing is still lobbying for a prohibitive surcharge, claiming that Bombardier receives unfair subsidies from the Quebec and Canadian governments.
Never mind that Boeing gets all sorts of tax breaks and R&D concessions from the US and state governments. In the mind of US legislators, protectionism only happens in other countries. The matter remains unresolved, with a decision expected from the US Department of Commerce by May 2018.
Depending on the outcome, maple leaves may replace kangaroos in the roundels of Australia’s existing fleet of jet fighters.
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