The growing trade feud between the US and Canada escalated overnight when Ottawa announced it was scrapping a plan to buy 18 F-18 Boeing Super Hornet fighter jets amid a deepening dispute with the U.S. aerospace company, Reuters reported. In a snub to the US, Canada’s Liberal government will instead announce that intends to acquire a used fleet of older Australia F-18 jets, the same kind of plane Canada currently operates.
The unexpected decision demonstrates Ottawa’s anger at a recent decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier which Beoing accuses of dumping airliners on the American market. It also puts into question the future of Boeing’s military sales in Canada, which however is a two-edged sword: Boeing says its commercial and defense operations in Canada support more than 17,000 Canadian jobs.
The trade spat comes as Canada and Mexico are locked into increasingly acrimonious negotiations with the United States over the NAFTA trade pact.
The Liberal Party of Prime Minister Justin Trudeau initially said in late 2016 it wanted the Boeing jets as a stopgap measure until it could launch a competition for a permanent fleet to replace Canada’s ageing CF-18 jets. But as relations with Boeing deteriorated, Ottawa slammed the firm for not acting as a trusted partner and began looking at the Australian jets.
Sensing an opportunity to grab market share, Australia’s Defense Department said Canada lodged a formal expression of interest for “a number” of Australia’s F/A-18 Classic Hornets on Sept. 29, in a statement emailed to Reuters.
“Defence is continuing to assist Canada in regards to their EOI,” the statement added, without disclosing a price or any other details. Two sources also said Australian military officials had been in Ottawa late last month for talks. One source said that by buying the Australian fleet, Canada would save money as well as avoid the need to train its pilots on a new aircraft or spend money on a new supply chain. Officials had previously said that if the purchase went ahead, some of the Australian aircraft would be used for spare parts.
It will be interesting if Canada escalates the trade war in the near future: the country is due to officially announce the requirements for its new fighter fleet in early 2019, kicking off an open competition. One potential contender is Lockheed Martin F-35 fighter, which Trudeau initially said he would not buy because it was too expensive. The government has since softened its line, saying the plane would be allowed to compete. In light of the feud with Boeing, however, Canada may end up opting for European alternatives instead.