MONTREAL/NEW YORK: The US Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier’s CSeries jets after rival Boeing accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.
The department said it imposed a steep 219.63 percent countervailing duty on Bombardier’s new commercial jets after it made a preliminary finding of subsidization. Boeing has complained the 110-to-130 seat aircraft were dumped below cost in the US market last year while benefiting from unfair subsidies.
An April 2016 order for 75 CSeries jets from Delta Air Lines stemmed from the same harmful sales practices European rival Airbus employed to win business in the 1990s, according to Boeing.
The Commerce Department’s penalty against Bombardier will only take effect if the US International Trade Commission (ITC) rules in Boeing’s favor in a final decision expected in 2018.
“We strongly disagree with the Commerce Department’s preliminary decision,” Bombardier said in a statement, calling the magnitude of the proposed US duty “absurd.”
Commerce’s announcement and accompanying fact sheet on the preliminary duty order did not provide any rationale or methodology for how it calculated the 220 percent duty.
The CSeries starts at $79.5 million, according to list prices, but carriers usually receive discounts of about 50 percent.
If imposed, the duties would more than triple the cost of a CSeries aircraft sold in the US to about $61 million per plane, based on Boeing’s assertion that Delta received the planes for $19 million each. Bombardier has disputed the $19 million sales figure.
There are not that many Commerce countervailing orders that are this high, but it is lower than the 256 percent final duties slapped on Chinese cold-rolled steel last year.
The timing is awkward because Canada and the US are in a three-way negotiation involving Mexico to modernize the North American Free Trade Agreement.
A source familiar with the Canadian government’s thinking said the Boeing trade dispute was “separate” from the NAFTA talks.
“This in no way is part of our conversation,” the source said. “People should not read too much into this piece today.”
The spat between Boeing and Bombardier has snowballed into a bigger fight this month when British Prime Minister Theresa May asked President Donald Trump to intervene in the dispute to help protect jobs in Northern Ireland, where Bombardier is the largest manufacturing employer.
The US has also faced opposition from a handful of American carriers and elected officials over potential US job losses.
Canada’s foreign affairs minister Chrystia Freeland said Bombardier CSeries components are supplied by American companies that support almost 23,000 jobs in US states, including Connecticut, Florida and New Jersey.
“This is clearly aimed at eliminating Bombardier’s C Series aircraft from the US market,” Freeland said. She added that Canada strongly disagrees with the anti-dumping and countervailing duty investigations.
Boeing said in a statement that the dispute “has everything to do with maintaining a level playing field and ensuring that aerospace companies abide by trade agreements.”
Bombardier’s was unwilling to swallow the extra cost for airlines if the US slaps duties on its CSeries jet, Reuters reported on Tuesday, citing people familiar with the matter.
“We are confident … no US manufacturer is at risk because neither Boeing nor any other US manufacturer makes any 100-110 seat aircraft that competes with the CS100,” Delta said in a statement.
Duties could chill US sales of the fuel-efficient CSeries, raising concerns over future orders and jobs in Canada and the United Kingdom.
Canadian Prime Minister Justin Trudeau had put his government’s planned purchase of Boeing Super Hornet fighter jets on hold because of the trade dispute, saying it could not “do business with a company that’s busy trying to sue us and put our aerospace workers out of business.”
Boeing has argued that the military sale to the Canadian government and its petition against Bombardier are not linked. But the US jetmaker has said the CSeries would not exist without hundreds of millions of dollars in launch aid from the governments of Canada and Britain, or a $2.5 billion equity infusion from the province of Quebec and its largest pension fund in 2015.
To win its case before the ITC, Boeing must prove it was harmed by Bombardier’s sales practices, despite not using one of its own jets to compete for the Delta order, Dan Pearson, a senior fellow at the libertarian Cato Institute think tank in Washington, said before Tuesday’s announcement.
“This (ITC case) cannot be a slam dunk,” said Pearson, a former ITC chairman. “I’m having a hard time figuring out how Boeing was harmed by this.”
Canada has pushed to settle the dispute. But one industry source said Boeing, which could gain some leverage with the Commerce Department’s initial decision in its favor, sees the possible CSeries dumping as a long-term threat to its civilian airliner business.
US slaps steep duties on Bombardier jets after Boeing complaint
US slaps steep duties on Bombardier jets after Boeing complaint
In speech to Congress, Trump reassures investors that new visa scheme would not tax foreign assets
- Taxing foreign assets was a concern despite big enthusiasm for new scheme, pundits had told Arab News
- “This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” Al-Ansari tells Arab News.
RIYADH: President Donald Trump assured that investors entering the US under the newly introduced $5 million “Gold Card” visa program will not be subject to taxes on their foreign assets.
This assurance comes as Trump and his administration seek to attract high-net-worth individuals from around the world by offering a direct pathway to US residency and citizenship.
Addressing Congress on March 4, Trump outlined the program’s structure. “They (investors) won’t have to pay tax from where they came, the money that they’ve made, you wouldn’t want to do that. But they have to pay tax (in the US) and create jobs,” he said.
His remarks came as a reassurance to prospective investors who may have been concerned about the Foreign Account Tax Compliance Act, which has deterred some wealthy individuals from seeking US residency due to global taxation concerns.
Arab News raised this concern in a previous article following Trump’s announcement of the new initiative.
Now that the president has cleared that doubt and reassured investors that their assets abroad won’t be taxed, Salman Al-Ansari, a geopolitical analyst and former US investor, emphasized that the Gold Card exemption is a game-changer.
“This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” he told Arab News in an interview.
Al-Ansari added that this exemption “is a clear indication that his administration is responsive to global investor concerns.”
However, he noted that despite this strong incentive, long-term concerns about possible changes in US tax policy are likely to remain. “Investors in the region understand that tax policies can change with different administrations, so some may still approach with caution, opting for structures that offer flexibility in case future regulations become less favorable,” Al-Ansari added.
Read: Will Trump strike gold with wealthy Arabs through new residency program?
The new initiative will replace the existing EB-5 visa program, which was originally designed to grant permanent residency to investors who contributed at least $1 million to a US business that created or sustained at least 10 jobs for American workers.
Trump emphasized to Congress that the initiative would address talent retention by allowing investors to fund and support highly skilled graduates from top US universities, preventing them from being forced to leave the country.
The US faces stiff competition from other nations with established golden visa programs, particularly Gulf nations like Saudi Arabia, which have successfully attracted high-net-worth individuals through similar initiatives.
On whether Saudi investors will become more selective about US investments due to domestic taxation under the Gold Card visa, Al-Ansari noted: “The exemption of foreign assets is a strong incentive, but the fact that income generated within the US is still taxable means that Saudi investors will likely be more strategic in their choices.”
He added: “They may favor sectors that offer higher tax efficiencies, such as real estate, energy, or industries benefiting from tax incentives.”
However, Al-Ansari said that as long as the US provides a stable business environment and competitive opportunities, taxation within the country is a reasonable tradeoff.
“The key factor for Saudi investors will be the ease of doing business and whether the Gold Card visa comes with additional facilitations that make investments more attractive beyond the tax benefits,” he concluded.
By structuring the Gold Card visa to exempt foreign assets from US taxation, Trump’s administration is positioning the program as an attractive alternative to other golden visa schemes worldwide.
Investors from the Gulf, who have already benefited from similar residency programs in their home countries, may now see the US as an increasingly viable destination for expanding their businesses and securing long-term financial stability.
As highlighted in a previous report by Arab News, the initiative is being closely watched due to its potential to attract substantial foreign capital, especially from countries like Saudi Arabia, the UAE, and Qatar.
Despite global competition from established golden visa programs, the US remains an appealing destination for investors, due to its business environment, talent pool, and real estate opportunities.
With the added benefit of no taxation on foreign assets, the Gold Card program is seen as a highly attractive option for investors looking to expand their businesses and secure long-term financial stability in the US.
Direct flights from Stuttgart to Jeddah to begin later this year
RIYADH: Direct flights from Stuttgart, Germany, to Jeddah, will begin in the second half of 2025 and operate twice a week, the Saudi Air Connectivity Program has announced.
Inaugurated in collaboration with the Saudi Tourism Authority and Jeddah Airports Co., the route is set to utilize an A321neo aircraft with a capacity of 224 seats, according to the Kingdom’s press agency.
This move aims to increase the capacity of travelers and visitors from Europe to Saudi Arabia, aligning with the government’s aviation goal of transporting 330 million passengers across over 250 destinations, as well as 4.5 million tonnes of air cargo, by 2030.
Majid Khan, CEO of ACP, said the collaboration with German low-cost carrier Eurowings — a wholly owned subsidiary of the Lufthansa Group — is advancing well in enhancing air connections between Saudi Arabia and Europe.
He further expressed confidence in forming a long-term partnership with the airline to broaden the network of flight routes in the future, offering travelers new opportunities to experience the Kingdom’s historical and cultural sites.
This falls in line with ACP’s goal to boost tourism in Saudi Arabia by enhancing air connectivity between the Kingdom and international destinations, broadening existing flight routes, and establishing connections to new global markets.
As the driving force behind the National Tourism Strategy and Saudi aviation strategy, ACP promotes collaboration and partnerships between crucial public and private sector players in the tourism and aviation sectors. Its objective is to enhance the Kingdom’s status as a premier global hub for air travel connectivity.
Jordan’s move to ease residency rules will attract investment, say experts
RIYADH: Jordan’s recent move to ease residency requirements for foreign investors is set to drive capital inflows, particularly into real estate, according to industry experts.
A recent decision by the country’s Cabinet will reduce financial barriers for foreign residents and property owners seeking to renew their residency, the Jordan News Agency, also known as Petra, has reported.
Among the key amendments, the government scrapped a 10,000 Jordanian dinar ($14,100) deposit requirement for foreign property owners who have lived in Jordan for more than two years.
Meanwhile, non-property owners applying for a five-year residency will see their required deposit halved to 10,000 dinar.
The changes mark a significant shift in Jordan’s investment strategy, aligning with regional trends that leverage residency incentives to attract long-term foreign capital. The policy adjustments are expected to stimulate real estate activity, benefiting adjacent industries such as construction, legal services, and financial consultancy.
According to Petra, Ali Murad, chairman of the Jordanian-European Business Association stated that the decision is a crucial economic measure that will inject liquidity into the local market and strengthen the real estate sector.
“Shifting residency requirements from bank deposits to property ownership will incentivize foreign investors to purchase real estate, boosting demand for construction and commercial projects,” Petra reported him saying.
Other experts believe that Jordan’s revised policy could make it a more competitive destination for international buyers looking for investment opportunities beyond traditional financial markets.
Fadi Al-Majali, chairman of the Jordanian Expat Business Association said that removing the deposit hold requirement for property owners enhances the attractiveness of real estate investment in the country, Petra reported.
The statement went on to say that Al-Majali believes “these amendments will encourage more foreign investors to acquire properties, thereby increasing market demand and supporting the continued development of the real estate and construction sectors.”
Iraqi investors, who have historically played a key role in Jordan’s property market, are also expected to benefit.
Majid Al-Saadi, chairman of the Iraqi Business Council in Amman, welcomed the policy shift according to the Jordan News Agency, emphasizing that it allows investors to allocate more capital into Jordan’s retail, healthcare, and education sectors.
While the new measures are expected to drive investment in the near term, experts argue that Jordan could further enhance its appeal by adopting long-term residency programs similar to the UAE’s “golden visa” initiative.
Gulf states have successfully used such programs to attract high-net-worth individuals, professionals, and entrepreneurs, creating a stable foreign investor base.
Closing Bell: Saudi main index closes in red at 11,811
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Thursday, losing 87.75 points, or 0.74 percent, to close at 11,811.11.
The total trading turnover of the benchmark index was SR7.08 billion ($1.88 billion), as 47 of the listed stocks advanced, while 198 retreated.
The MSCI Tadawul Index decreased by 9.34 points, or 0.62 percent, to close at 1,490.08.
The Kingdom’s parallel market Nomu dipped, losing 258.75 points, or 0.82 percent, to close at 31,296.73. This comes as 34 of the listed stocks advanced while 49 retreated.
The best-performing stock was Tanmiah Food Co., with its share price surging by 4.7 percent to SR127.
Other top performers included Malath Cooperative Insurance Co., which saw its share price rise by 4.30 percent to SR13.58, and Almasane Alkobra Mining Co., which saw a 3.70 percent increase to SR56.
Mouwasat Medical Services Co. saw the biggest decline of the day, with its share price dropping 9.34 percent to SR75.70.
Walaa Cooperative Insurance Co. fell 8.02 percent to SR18.82, while Al-Majed Oud Co. dropped 7.42 percent to SR132.20.
On the announcements front, Al-Majed Oud Co. released its financial results for 2024, with net profits reaching SR156.9 million, up by 5.5 percent compared to the previous year.
In a statement on Tadawul, the company attributed the increase to a surge in sales through geographic expansion and opening new stores, as well as launching new products and an uptick in the e-commerce business.
In another announcement, Jabal Omar Development Co. declared its annual financial results for 2024.
The company’s net profit in 2024 reached SR200 million, up from SR37.4 million in the previous year, marking a 433.8 percent surge.
The firm said in a statement that this surge was attributed to a growth in revenue by SR575 million, driven by the improved operations of two new hotels, Address Jabal Omar and Jumeirah Jabal Omar, along with a significant rise in hotel occupancy and commercial center revenues.
Additionally, the company recognized SR748 million in other operating income from the sale of land in the Jabal Omar project. This surge was achieved despite a rise in general and administrative expenses.
The firm’s shares traded 3.07 percent lower on the main market to close at SR25.30.
Basic Chemical Industries Co. also announced its financial results for the previous year, with net profits reaching SR40.3 million, down by 8.1 percent compared to 2023.
In a statement on Tadawul, the company attributed the decrease in profit to an increase in general and administrative expenses, zakat tax, and a drop in profits from the sale of fixed assets and other operating income.
The firm’s shares traded 1.56 percent lower on the main market to close at SR28.40.
Saudi Arabia’s M&A market sees 63% rise in Feb
RIYADH: Saudi Arabia approved 26 mergers and acquisitions applications in February, a month-on-month surge of 62.5 percent, highlighting a competitive business climate.
The Kingdom’s General Authority for Competition confirmed the agreements, spanning acquisitions, mergers, and joint ventures, following comprehensive market assessments to ensure fair competition.
Acquisitions led the approvals, comprising 73 percent of the total, followed by joint ventures at 19 percent, and mergers at 8 percent, according to GAC data.
Saudi Arabia mandates economic concentration approvals for M&A deals to prevent monopolies and market distortions.
The rise in approvals aligns with GAC’s broader strategy to foster fair competition, combat anti-competitive practices, and enhance market efficiency, ultimately boosting investor confidence.
Among the approved acquisition requests, Spark Education Platform secured all stakes in three educational institutes in the UAE and Bahrain.
The mergers category included UAE-based Aurora Spirit’s consolidation with US-based Berry Global, while London-based law firm Herbert Smith Freehills merged with US-based Kramer Levin.
In the joint ventures segment, Ajlan & Bros Mining partnered with Moxico KSA Ltd. to launch a zinc-copper project in Khnaiguiyah, southwest of Riyadh. Additionally, Abu Dhabi Future Energy Co. formed a joint venture with France’s EDF International SAS and Nesma Co. to develop a solar energy project in Madinah.
This follows a surge in mergers and acquisitions across the country, with 202 economic concentration requests approved in 2024 — the highest on record — marking a 17.4 percent increase and underscoring the Kingdom’s efforts to enhance its competitive business environment.
The Kingdom’s M&A momentum stands in contrast to the global downturn in deal-making. A December report from GlobalData indicated that worldwide deal volume fell 8.7 percent year on year in the first 11 months of 2024, with the Middle East and Africa region experiencing a relatively modest 5 percent decline.
GAC continues to evaluate economic concentration requests — including mergers, acquisitions, and joint ventures — to safeguard competitive market dynamics. It also monitors various sectors for potential competition law violations, ensuring a level playing field for businesses.
