Britain has been left on the brink of a trade war with the United States after the Government warned aircraft manufacturer Boeing it could be stripped of lucrative defence contracts over its dispute with rival Bombardier.
Defence Secretary Michael Fallon said Boeing’s decision to pursue a complaint leading to punitive import tariffs on the sale of jets by Belfast-based Bombardier would “jeopardise” relations with the US company that only last year secured a £1.7bn British contract to build Apache helicopters.
Theresa May said she was “bitterly disappointed” by the decision – over which she is understood to have lobbied President Donald Trump – as it could threaten thousands of jobs in Northern Ireland and heap pressure on her fragile agreement with the Democratic Unionist Party (DUP).
The concern centres on an interim decision by the US Department of Commerce to slap a 220 per cent tariff on the sale of Bombardier’s C-Series jets, after Boeing complained that its rival had received unfair state subsidies on sales of planes in the UK and Canada.
The verdict is likely to come as a blow to Ms May’s plans for a post-Brexit trade deal with the US, with one expert warning it could “give us a taste of what ‘America First’ really means”.
Sir Michael said: “Boeing is a major defence partner and one of the big winners of the latest defence review so this is not the kind of behaviour we expect from a long-term partner.
“This is not the behaviour we expect of Boeing and could indeed jeopardise our future relationship with Boeing.”
He added: “Boeing stand to gain a lot of British defence spending.
“We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters and they will also be bidding for other defence work and this kind of behaviour clearly could jeopardise our future relationship with Boeing.”
If the tariff is ratified in a final ruling, due in in February, it could have a devastating impact…