Bombardier’s shares dropped sharply on Tuesday as President Donald Trump escalated tensions in the U.S.-Canada trade war, threatening to prohibit the sale of the Canadian aircraft manufacturer’s products in the United States unless it commits to domestic production.
The president issued the warning via social media on Monday afternoon, hours before Canada enacted new tariffs on $20 billion worth of American goods. The timing signaled that the trade dispute, marked by steep import taxes and potential bans, could expand rapidly this week.
Following the announcement, Bombardier’s shares listed in Toronto slid 6%, with its U.S.-listed counterpart, BDRBF, experiencing an identical decline. RBC Capital Markets analysts characterized the development as a negative for investor sentiment, noting it introduces “near-term uncertainty around U.S. customer commitments.” However, they pointed out that Trump has previously targeted the aerospace firm. In January, he suggested decertifying certain Bombardier business jets and imposed a 50% tariff threat on Canadian-built aircraft over Canada’s refusal to certify Gulfstream planes, a General Dynamics subsidiary. That conflict was resolved after Canada agreed to certify the relevant Gulfstream models.
In his holiday post, Trump wrote, “NO MORE SELLING BOMBARDIER IN THE UNITED STATES! Their products aren’t good enough!” He argued that the company relies heavily on American buyers, companies, airports, and service providers while Canada blocks “GREAT American Banks, and Companies,” specifically citing the restriction on Gulfstream Aerospace. “That Era is OVER! If they want our Market, they must build here, and stop treating America like a ‘piggybank,’” he stated, urging consumers to “BUY AMERICAN. FLY ON AMERICAN AIRLINERS.”
Bombardier responded by highlighting its extensive domestic footprint, stating it maintains operations across 47 states and employs thousands of Americans through its supply chain. The company emphasized its direct presence in more than 20 states, including facilities in Red Oak, Texas, and Los Angeles, along with planned investments in Fort Wayne, Indiana.
The trade confrontation is set to widen as Canada’s $20 billion in retaliatory tariffs took effect early Tuesday, countering the 50% duties Trump imposed last month on Canadian imports using Section 338 of the Tariff Act of 1930. This legal shift followed a February Supreme Court ruling that rejected Trump’s use of the International Emergency Economic Powers Act of 1977.
Chris Krueger, managing director at TD Cowen’s Washington Research Group, predicted a U.S. response to Canada’s tariffs could arrive as soon as today. He suggested the administration might expand Section 338 powers or increase tariffs under Section 232 of the Trade Expansion Act of 1962. Currently, Section 338 duties cover only about 5% of Canadian imports, and officials have hinted at broader import bans. Krueger identified Canada’s alcohol and dairy sectors as particularly vulnerable.
Analysts at Capital Alpha Partners cautioned that Trump’s comments amounted to a “call for a U.S. boycott,” warning of potential global risks to sales of American business jets. They also noted the move could harden Canadian resistance to purchasing Lockheed Martin F-35A fighter jets, which are not yet under firm contract.
Does anyone else find it ironic he calls their jets ‘not good enough’ while trying to force them to build here?
Bombardier saying they employ thousands in the US feels like a weak shield against an outright ban threat.