Trade dispute could leave U.S. firms out of the running to sell military equipment to Canada
S E E D E D C O N T E N T
Trade dispute could leave U.S. firms out of the running to sell military equipment to Canada
Trump’s tariffs come at a time when European firms are courting the Canadian government, particularly on big-ticket defence items such as aircraft and warships
A Canadian Forces CF-18 Hornet comes in for a landing at CFB Bagotville, Quebec, on June 7, 2018.Geoff Robins/AFP/Getty Images
U.S. President Donald Trump’s tirade against Canada and threats to punish the country could undermine efforts by American firms trying to sell fighter jets and other military equipment to the Canadian Forces, warn defence and industry analysts.
One European firm, Airbus, has already been talking with Canadian officials to pitch its plan to build fighter jets in Quebec as it positions itself to win the $16-billion deal to replace CF-18 aircraft.
An Italian aerospace firm, Leonardo, is looking at building helicopters in Nova Scotia as it moves towards negotiations for a search-and-rescue aircraft modernization project the Department of National Defence says will be worth between $1 billion and $5 billion.
Trump has hit Canadian aluminum and steel with tariffs, claiming their import is a threat to national security. After the weekend G7 meeting and Prime Minister Justin Trudeau’s reaffirming that Canada would reciprocate with tariffs on specific U.S. products, Trump vowed more economic grief that will “cost a lot of money for the people of Canada.”
Trump’s move comes at a time when European firms are courting the Canadian government, particularly on big-ticket defence items such as aircraft and warships. Billions of dollars in new purchases are potentially at stake and European firms had a strong presence at the recent CANSEC military equipment trade show in Ottawa.
“Trump certainly isn’t helping U.S. defence companies who want to sell to Canada,” said Martin Shadwick, a defence analyst in Toronto. “It would be very difficult at this point from a political optics point of view for the government to announce awarding contracts to any American firm.”
Shadwick said whether that situation will continue for the next several years, when for instance the decision on new fighter jets is supposed to be made, would depend on any further actions by the president. Two U.S. aircraft, the Boeing Super Hornet and the Lockheed Martin F-35, are among the top contenders in that jet competition. The other three aircraft are from European companies.
An earlier trade dispute with Canada has already backfired on Boeing and the Trump administration, costing the U.S. billions in fighter jet sales. Last year Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the Trump administration brought in a tariff of almost 300 per cent against Bombardier aircraft sold in the U.S.
In retaliation, Canada decided against buying 18 new Super Hornet fighter jets from Boeing. That deal would have been worth more than US$5 billion.
Trump certainly isn't helping U.S. defence companies who want to sell to Canada
Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, said it is too early to determine the impact of the U.S. tariffs on the domestic defence industry. “Tariffs are never good for trade or business,” she added.
“CADSI is monitoring the issue and consulting our members to better understand the potential impact to Canadian firms, both in terms of the direct impact of any tariffs and the more indirect, long term impact on supply chains and market access,” she said.
There is growing concern that Canadian aviation firms could be hurt by Trump’s aluminum tariffs. The Aerospace Industries Association of Canada did not respond to a request for comment. But its counterpart in the U.S. has voiced concern that American aerospace companies could feel pain.
In March, the U.S. Aerospace Industries Association noted it was deeply concerned about Trump’s tariffs on steel and aluminum as it “will raise costs and disrupt the supply chain, putting U.S. global competitiveness at risk.”
“There is also a significant threat for retaliation from other countries towards American made products,” the association noted in a statement.
Canada is the largest exporter of aluminum and steel to the U.S
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For some reason, what is happening here made me think of the movie "Network" when Arthur Jensen put Howard Beale in the boardroom and said this to him:
You have meddled with the primal forces of nature, Mr. Beale, and I won't have it! Is that clear? You think you've merely stopped a business deal. That is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU... WILL... ATONE! Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that... perfect world... in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel.
You have meddled with the primal forces of nature, Mr. Trump.
U.S. global competitiveness at risk.”
E.A What no more cluster bombs and Land mines coloured the same as UN Food Parcels...who would have thought … what is the US of A becoming?
Canada buys military equipment?? What, they're upgrading from WW1 equipment to WW2 stuff?
WW1 Hornets? I once saw a sci-fi movie about a modern American fighter jet going through some time warp and ending up flying into a battle with the WW2 Japanese Zeros - scared the shit out of the Japanese.
Did you see the photo I posted of the Avro Arrow, developed in Canada - an interceptor that could fly 3 times the speed of sound at 60,000 feet. that got scrapped because the Americans who had promised to buy it changed their minds and developed their own planes. So what's happening now is not the first time the Americans fucked the Canadians - getting even for the American defeat at the battle of Stoney Creek in 1812.
Go on Buzz, what's next? I suppose now you're going to try to claim that you don't live in igloos!
I'll bet YOU never had that experience. One time when there was a really big snowstorm when I was a little kid, my older brother and I built an igloo in our back yard and slept the night in it. It was an experience not to be repeated.
TRY to stay on topic, eh?
Trade dispute could leave U.S. firms out of the running to sell military equipment to Canada
Oops!
Omg this will crush our economy
NOT
LOL. You're right, at least 20 billion dollars worth of business, and the employment that creates, and the general economy from spent employee dollars, is nothing but a drop in the bucket. Hey, European manufacturers need that money much more than American ones anyway.
Well, as I said, it's a drop in the bucket for you.
ya think they are going to just close up the shop and let all the metal sit and rust? if so... you do not understand capitalism.
all this means is canada is out of the running for american hardware... plenty of business still to be done elsewhere.
International trade has always been about give and take. You might "give" on one item to "take" on another and so on. The goal is an overall fair deal for both sides. Few of us truly understand the entire scope of what's going on in such dynamic cases like this but i can assure you while both sides will get hurt in this deal, Canada will take the hardest hit. At least initially. I think both leaders intentions for their respective nation are good, albeit a little ham fisted on both sides. I hope both can come to their senses, do their jobs and work it out for both countries sake.
Although you sometime get a little self righteously sanctimonious, we love us some Canada here in the US. You are a great and valued neighbor. I hope this gets worked out with a minimal amount of damage to either side. Its in both our interest to do so.
Yes, Canada and the USA are the best of neighbours. Can you imagine what your life would be like if Canada was actually a big Gaza with Hamas in control?
I agree 100% and it goes both ways. Something both leaders would do well to remember.
This is a lot of hyperventilating over "maybe's" and "if's" that are well into the future.
Meanwhile, if you're Canadian, how do you feel about the idea that your government might purchase military weaponry based not on what does the job the best, but rather which one they can pick up on a BOGO 1/2 off deal? Do you want the fighter plane that kills the enemy or the one that comes with a free toaster/oven?
Anybody got a coupon? Those Bed Bath n Beyond ones are 20% off and they're good forever.