PM May Warns Boeing in International Trade Tussle

May protectionism, Bombardier
The Bombardier Aerospace plant in Belfast, Northern Ireland. (Brian Lawless/PA, File via AP)

British Prime Minister Theresa May warned Thursday of growing protectionism in the global economy and hinted that Boeing could pay for its role in the U.S. government proposal to impose a massive tariff that could cost thousands of jobs in Northern Ireland.

Addressing a conference organized by the Bank of England, May mounted a strong defense of free trade, days after the U.S. Commerce Department proposed a tariff of almost 220 percent on Bombardier’s C series aircraft, a huge cost to exports that threatens more than 4,000 jobs in Northern Ireland.

Without directly threatening the Chicago-based aircraft maker, May said the actions of Boeing, which had sought U.S. government action over what it saw as unfair competition from Canada’s Bombardier, “is not the sort of behavior we expect from a long-term partner” and that it “undermines that partnership.”

May pointed out that the British government has various dealings with Boeing, particularly in the field of defense.

Boeing alleged that Bombardier received at least $3 billion in subsidies from the governments of Britain, Canada and the province of Quebec, allowing it to sell planes to U.S.-based Delta Air Lines for less than the cost of production. Boeing asked the Commerce Department and the U.S. International Trade Commission to investigate what it called “predatory pricing.”

Delta last year agreed to buy 75 of Bombardier’s new CS100 aircraft, with an option for as many as 50 more. Bombardier valued the firm order at $5.6 billion based on the list price of the aircraft. In response, Delta says Boeing doesn’t even make the 100-seat planes it needs for short- to medium-range trips.

The trans-Atlantic spat has raised concerns that Britain and the U.S. could end up in a tit-for-tat trade tussle. That is particularly problematic for a government that is negotiating Brexit and hoping to tie up a subsequent trade deal with the U.S.

One of the main motivations of those backing Brexit is that it will untie Britain’s hands in trade as the EU currently negotiates trade deals on behalf of its 28 member states. Critics have always said that Britain would be in a better position to negotiate trade deals through the clout of the EU.

May said she was working with her Canadian counterpart, Justin Trudeau and leaders in Northern Ireland, to “impress” on the U.S. government the importance of Bombardier to Northern Ireland. May’s government is also being propped up in Parliament by the votes of Northern Ireland’s Democratic Unionist Party.

The final decision on whether the U.S. tariff will be imposed will be made by the International Trade Center.

Though riled by the developments surrounding Bombardier, May insisted that her government would push for free trade after Britain leaves the European Union in March 2019.

“I think there is a real challenge for us globally today because I think that here are aspects of protectionism creeping in around the world,” she said.

“I have said before I want the U.K. to be a global champion of free trade, because I think those of us who believe in free trade need to stand up, not just explain its wider benefits, but help to explain its benefits to individuals.”

Her defense of free trade comes a day after Jeremy Corbyn, the leader of the main Labour Party opposition, made the case for more state involvement in the British economy.