The radiating mischief of protectionism

Boeing, America’s 39th largest corporation by market capitalization (over $150 billion) and 24th by revenue ($94.6 billion) complains that it is being injured because the Canadian aircraft manufacturer Bombardier (market capitalization around $5 billion) was “dumping” its C Series passenger planes in the U.S. market. That is, selling them unfairly cheaply to U.S. buyers. The nature of Boeing’s injury is unclear because it does not make a plane that directly competes with the C Series. Boeing’s complaint came after Bombardier agreed to sell 75 planes to Delta Airlines for $5.6 billion, a contract for which Boeing did not bid. The C Series single-aisle planes, which seat 100 to 160 passengers, are smaller than Boeing’s 737.

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All manufacturers of commercial aircraft, including Boeing, sell their products for amounts substantially below list prices. (Boeing’s 787 lost $29 billion over five years before becoming profitable last year.) Boeing, however, cheekily charges that Bombardier is able to be excessively nice to U.S purchasers because the C Series receives government subsidies, including equity investments, worth under $2.8 billion. This is, however, the Boeing pot calling the Bombardier kettle black.

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