4 ms·

Boeing really shot themselves in the foot there, although as I understand it they asked for an 80% tariff and the US government instead imposed a 300% one. A re

Boeing really shot themselves in the foot there, although as I understand it they asked for an 80% tariff and the US government instead imposed a 300% one. A reminder of the dangers of protectionism, perhaps, although admittedly the original 80% tariff might still have been enough to force Bombardier into the Airbus partnership.

nolok 8y ago
Especially since Boeing had already spent good money to get the Embraer plane in their lineup, and their actions "gave" its biggest competitor to Airbus for free. And in the other side of it, the deal will also majorly benefit Bombardier overall, obviously compared to no deal, but even long term compared with going on their own; Airbus is now pushing the plane hard like a normal part of their lineup, it doesn't compete with another Airbus plane since they didn't have one there yet (they were like Boeing except they snapped the Embraer one first). And the plane having access to the entire Airbus network is a big big plus (which is pretty much why it was instantly renamed A220, making it clear to customer it was a long term fully supported Airbus plane not a temporary off shot). Even the Québec gov is happy since the deal protects all the jobs and manufacturing locations, only difference is final assembly done in Alabama, and only for US customers. Also, Airbus was supposed to make their own and then compete directly with Bombardier too. Making two ennemies ally with each other is a really dumb move, and good luck taking it back once they both start reaping the benefits of that alliance.
basetop 8y ago
Extreme protectionism can be dangerous for sure. But the Bombardier example and protectionism in aerospace isn't a negative example of protectionism. It actually shows that protectionism works. The US benefited by having bombardier planes being built in the US. More jobs, more work for american workers and more taxes for the government. It's a win-win situation. You could argue that Boeing lost out, but they really didn't either. Bombardier, Airbus, Boeing and the entire aerospace industry in every country exists primarily due to protectionism. Without canadian government support and market protection, bombardier could not exist. Without EU protection, Airbus cannot exist. Boeing or other aerospace companies would have underbid bombardier and airbus out of existence because they produced their own planes. It's why China and Japan also use significant protectionism to protect their aerospace industry. They, like the US and EU, all "encourage" their own national carriers to buy from national manufacturers. As others have noted, aerospace industry is inherently dual function just like satellite/GPS industry. They, by their innate nature, serve both the civilian and military industries. I know we are told "protectionism" is bad from a young age, but the modern industrial world ( starting with the US ) was created by protection. Almost every industry in every industrial nation owes it's rise to protectionism. If you have the time, you should read up on the history of US protectionism in the 1800s, which set the example that every major economy from china to germany to japan to south korea followed to become major economic players. Without protectionism, we don't have Airbus, Bombardier, etc. Without protectionism, we also don't have Samsung, Toyota, Sony, Volkswagen, etc. Without protectionism, every industry in the US would have been bought up or controlled by the wealthier british industrialists. The first act of Congress was an act of protectionism - a tariff. https://en.wikipedia.org/wiki/Tariff_of_1789 https://en.wikipedia.org/wiki/Tariff_of_1789
- nolok 8y ago
  > Extreme protectionism can be dangerous for sure. But the Bombardier example and protectionism in aerospace isn't a negative example of protectionism. It actually shows that protectionism works. The US benefited by having bombardier planes being built in the US. More jobs, more work for american workers and more taxes for the government. It's a win-win situation. You could argue that Boeing lost out, but they really didn't either. No they didn't. No new plant, no new hires, no more planes built at that plant than before. They will displace planned production at that plant to make room for the specific planes requesting by US customers, and the plane originally meant to be built there will be made in another non US plant. The ONLY thing that changes for the US is negative in that Boeing's competitors are now stronger and allied together against Boeing.
  - basetop 8y ago
    Lets say you are right. If protectionism was so bad for the US and so good for our competitors, then our competitors would be begging us to increase our protectionism. But they are doing the exact opposite. If protectionism was so good for the competitor, Boeing and the US government wouldn't be attacking the EU and their subsidies and protectionism of Airbus. If protectionism is so bad for Boeing, why have the Boeing execs lobbied the US government for more protectionism? If protectionism is so bad, why has bombardier lobbied canada and quebec for protectionism for decades? If protectionism is so bad, why has airbus lobbied for protectionism from the EU even before they became operational? Airbus was born with protectionism and subsidies that is the envy of the world. I'm not entirely for or against protectionism, but the blanket ideology that protectionism is bad is historically incorrect. Ask Boeing, ask Airbus, ask Bombardier. If Airbus starts demanding more tariffs, subsidies and protectionism for Boeing in the US, then I'll start to believe what you say. If Boeing demands that EU give Airbus even more subsidies and greater market protection it the EU, then I'll start to believe what you say.
    - _Codemonkeyism 8y ago
      Your argument basically is: War is good, b/c after the first strike everything is ok for the attacker. You forget that there is always some kind of reaction. Protectionism always works in the short run. We'll see how protectionist US looks in 10y. Then you can argue depending on results it works.

nolok 8y ago

Especially since Boeing had already spent good money to get the Embraer plane in their lineup, and their actions "gave" its biggest competitor to Airbus for free. And in the other side of it, the deal will also majorly benefit Bombardier overall, obviously compared to no deal, but even long term compared with going on their own; Airbus is now pushing the plane hard like a normal part of their lineup, it doesn't compete with another Airbus plane since they didn't have one there yet (they were like Boeing except they snapped the Embraer one first). And the plane having access to the entire Airbus network is a big big plus (which is pretty much why it was instantly renamed A220, making it clear to customer it was a long term fully supported Airbus plane not a temporary off shot). Even the Québec gov is happy since the deal protects all the jobs and manufacturing locations, only difference is final assembly done in Alabama, and only for US customers. Also, Airbus was supposed to make their own and then compete directly with Bombardier too. Making two ennemies ally with each other is a really dumb move, and good luck taking it back once they both start reaping the benefits of that alliance.

basetop 8y ago

Extreme protectionism can be dangerous for sure. But the Bombardier example and protectionism in aerospace isn't a negative example of protectionism. It actually shows that protectionism works. The US benefited by having bombardier planes being built in the US. More jobs, more work for american workers and more taxes for the government. It's a win-win situation. You could argue that Boeing lost out, but they really didn't either. Bombardier, Airbus, Boeing and the entire aerospace industry in every country exists primarily due to protectionism. Without canadian government support and market protection, bombardier could not exist. Without EU protection, Airbus cannot exist. Boeing or other aerospace companies would have underbid bombardier and airbus out of existence because they produced their own planes. It's why China and Japan also use significant protectionism to protect their aerospace industry. They, like the US and EU, all "encourage" their own national carriers to buy from national manufacturers. As others have noted, aerospace industry is inherently dual function just like satellite/GPS industry. They, by their innate nature, serve both the civilian and military industries. I know we are told "protectionism" is bad from a young age, but the modern industrial world ( starting with the US ) was created by protection. Almost every industry in every industrial nation owes it's rise to protectionism. If you have the time, you should read up on the history of US protectionism in the 1800s, which set the example that every major economy from china to germany to japan to south korea followed to become major economic players. Without protectionism, we don't have Airbus, Bombardier, etc. Without protectionism, we also don't have Samsung, Toyota, Sony, Volkswagen, etc. Without protectionism, every industry in the US would have been bought up or controlled by the wealthier british industrialists. The first act of Congress was an act of protectionism - a tariff. https://en.wikipedia.org/wiki/Tariff_of_1789 https://en.wikipedia.org/wiki/Tariff_of_1789

nolok 8y ago
> Extreme protectionism can be dangerous for sure. But the Bombardier example and protectionism in aerospace isn't a negative example of protectionism. It actually shows that protectionism works. The US benefited by having bombardier planes being built in the US. More jobs, more work for american workers and more taxes for the government. It's a win-win situation. You could argue that Boeing lost out, but they really didn't either. No they didn't. No new plant, no new hires, no more planes built at that plant than before. They will displace planned production at that plant to make room for the specific planes requesting by US customers, and the plane originally meant to be built there will be made in another non US plant. The ONLY thing that changes for the US is negative in that Boeing's competitors are now stronger and allied together against Boeing.
- basetop 8y ago
  Lets say you are right. If protectionism was so bad for the US and so good for our competitors, then our competitors would be begging us to increase our protectionism. But they are doing the exact opposite. If protectionism was so good for the competitor, Boeing and the US government wouldn't be attacking the EU and their subsidies and protectionism of Airbus. If protectionism is so bad for Boeing, why have the Boeing execs lobbied the US government for more protectionism? If protectionism is so bad, why has bombardier lobbied canada and quebec for protectionism for decades? If protectionism is so bad, why has airbus lobbied for protectionism from the EU even before they became operational? Airbus was born with protectionism and subsidies that is the envy of the world. I'm not entirely for or against protectionism, but the blanket ideology that protectionism is bad is historically incorrect. Ask Boeing, ask Airbus, ask Bombardier. If Airbus starts demanding more tariffs, subsidies and protectionism for Boeing in the US, then I'll start to believe what you say. If Boeing demands that EU give Airbus even more subsidies and greater market protection it the EU, then I'll start to believe what you say.
  - _Codemonkeyism 8y ago
    Your argument basically is: War is good, b/c after the first strike everything is ok for the attacker. You forget that there is always some kind of reaction. Protectionism always works in the short run. We'll see how protectionist US looks in 10y. Then you can argue depending on results it works.