Defence Secretary warns Boeing over trade dispute with Bombardier

A complaint by Boeing has seen the US Department of Commerce propose a 220% tariff on the sale of Bombardier's new C Series jets - an aircraft whose wings are made in Belfast.

Sir Michael delivered a stark message to Boeing that such a stance could risk lucrative defence contracts with the UK.

He 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."

Boeing has signed multibillion-pound defence contracts with the UK.

Prime Minister Theresa May has vowed to work to protect jobs at Canadian-owned Bombardier's operations in Northern Ireland after expressing bitter disappointment at the proposed tariff on the import of its passenger jets to the US.

If the tariff is ratified in a final ruling, expected in February, it could have a devastating impact on Bombardier and, as a consequence, its Northern Ireland workforce.

Boeing complained that Bombardier had been given a competitive trading advantage through state subsidies offered by both the UK and Canadian Governments.

More than 4,000 people are employed in Belfast by Bombardier and thousands more aerospace jobs in Northern Ireland are supported through the manufacturer's supply chain.

The Democratic Unionist Party (DUP), which the Tories rely on to swing key Commons votes for the Government, has repeatedly pressed the Prime Minister over the issue.

Mrs May, who has directly lobbied US President Donald Trump over the dispute, expressed regret at the decision.

"Bitterly disappointed by initial Bombardier ruling," a tweet on the Prime Minister's official account said. "The Government will continue to work with the company to protect vital jobs for Northern Ireland."

While Bombardier branded the decision "absurd", unions have accused Mrs May of being "asleep at the wheel".

The controversial US decision came as Foreign Secretary Boris Johnson was using the launch of a new think-tank on Wednesday to push the cause for global free trade.

The future of the C Series jets appeared secure after Bombardier signed a 5.6 billion US dollar (£4.16 billion) deal in 2016 to provide the aircraft.

The manufacturer, which has been a major employer in Northern Ireland for 30 years, is due to begin delivering a blockbuster order for up to 125 new jets to Atlanta-based Delta Airlines in 2018.

Announcing the regulator's preliminary finding on Tuesday, US Secretary of Commerce Wilbur Ross said the subsidisation of goods by foreign governments was something that President Trump's administration "takes very seriously".

Sir Michael was on a scheduled visit to another major employer in Belfast - Harland and Wolff shipyards, which is on a site adjacent to Bombardier in the city's docklands.

He said the UK wanted to see the dispute resolved through a negotiated settlement.

"We want a long-term partnership with Boeing but that has to be two way," he said.

He said the UK would be putting renewed pressure on the Trump administration.

"We will be redoubling our efforts to bring about a negotiated settlement that avoids the kind of punitive action which would cost jobs here in Belfast," he said.

Labour leader Jeremy Corbyn urged the Government to stand up to the US President.

"If the special relationship means anything, it must mean that we can say to Washington: that way is the wrong way," he told his party conference in Brighton.

"That's clearly what's needed in the case of Bombardier, where thousands of jobs are now at stake.

"A Prime Minister betting our economic future on a deregulated trade deal with the US might want to explain how 220% tariffs are going to boost our exports."