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0 pointsnetsharc8y ago0 comments

A Guardian article https://www.theguardian.com/business/nils-pratley-on-finance... says:

> Arch-rival Airbus has swooped from the wings to grab majority control of the C-Series and proclaim that the 300% tariffs can be side-stepped via the simple remedy of conducting the final assembly of planes destined for US customers in Alabama.

So, how much of a final assembly counts as final assembly? I remember a story of how Chinese shirtmakers circumvented tariffs against Made in China shirts: they sent the body of the shirt and sleeves to Hong Kong, workers in Hong Kong sewed the sleeves onto the shirt, slap "Made in Hong Kong" on it, and problem solved...

Apparently I'm not the one asking this question: http://www.chicagotribune.com/business/ct-biz-airbus-bombard...

> "There is a legal question of how much of the parts and components and value-added needs to actually happen in the U.S. for tariffs to no longer apply," said Chad Bown, a senior fellow with the Peterson Institute for International Economics. "You can't just fly an airplane to Alabama and say it's made in America."

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5 comments · 4 top-level

pasbesoin8y ago· 1 in thread

Mexico has been an avenue for this, for the Chinese. Parts/assemblies shipped to Mexico for final assembly -- perhaps, in some case, as I understand it, in an extreme bending of the... "rules", simply for packaging.

Then, over the border the finished, packaged products go, tariff-free, under the auspices of NAFTA.

Separately, I'll mention that I've heard commentary on Canadian news to the effect that the Provincial and perhaps National governments provided assistance -- not taking an ownership stake; rather, direct financial assistance -- to Bombardier to aid in development of the jet.

To the extent that expected returns, financial and employment and whatever, are now leaving the Province and Canada, this leaves those governments out in the cold and deprived of expected returns. I don't know all the details of this, and perhaps what I heard was biased, but it was described at length and very critical e.g. of the governments not having built greater assurances into the aid they provided.

igrekel8y ago

The province did take a stake when it provided assistance but the stake taken was on the CSeries program end not on BBD itself. And hat stake just got diluted a while lot by the deal with Airbus (going from 49% to less than 20%).

usrusr8y ago

When in doubt, apply the magic of cross-site IP licencing to coax the value-add distribution into whatever shape necessary.

ecommerceguy8y ago

Embraer (Brazil) does final assembly of their private jet line in Melbourne Florida. I toured the factory. How it works is the fuselage is boated from Brazil and then assembled in FL. Wiring, hydraulics ect all done in Fl. Perhaps a peek at their public statements can shed some light as to when the nexus occurs.

pingec8y ago

Pipistrel from Slovenia had a similar problem. IIRC they had to ship parts to USA/Australia and assemble them over there. Now they moved part of production to Italy and this seems to have circumvented some of these problems.

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