In September, Donald Trump threatened to block sales of Canada-based business aircraft manufacturer Bombardier in the United States. This came just before Trump escalated tariffs in his on-going trade war with Canada.
Apparently, Trump and his staff failed to research the corporation. He did not realize that Bombardier has major manufacturing facilities in Wichita, Kansas. The company employs 1,500 workers in Kansas and more than 3,500 across the United States.
Political Expediency
Trump called for a halt of sales of Bombardier jets in the United States. But now Kansas has become a battleground state politically. Polls show the possibility of a first Democratic Senate win since 1932. Embattled Republican Senate candidate Roger Marshall called on the President to walk back his threats. Given Bombardier’s large operations in Kansas, a sales ban could result in the loss of high-paying jobs.
Trump failed to realize that the multinational nature of Bombardier’s business benefits the US in many ways. That reflects a weakness in leadership and professionalism. Failure to understand the fundamentals prior to threats is a level of incompetence normally not seen in the White House. Once again weak-minded moves have cost the reputation of the United States on the global stage.
On September 7th Trump posted on social media “NO MORE SELLING BOMBARDIER IN THE UNITED STATES! If they want our Market, they must build here, and stop treating America like a ”piggy-bank.”
Bombardier’s Response
Bombardier stated that it pays more then $2.5 billion to 2,800 US suppliers in 47 states each year. “The American aerospace industry is a clear winner on trade and exports,” Bombardier stated after Trump’s threat. “Our recently announced investments and newly inaugurated North American Learning Center will support high-skilled jobs for many years to come. We are proud of our engaged workforce in Wichita as well as in all 20-plus states in which Bombardier employs team members.”
TACO – Trump Always Chicken’s Out
Once the political impact of losing a potential Senate seat for the Republicans became apparent, Trump backing off his previous position became a “fait accompli.” This is typical of Trump, who has reversed positions on multiple occasion to earn the nickname TACO Trump.
The Impacts of Trump Threats
Fortunately, the Trump threats were viewed as unrealistic on both sides of the border, and there was virtually no impact on sales of Bombardier aircraft in the US. A part of this may be the expectation that Trump was likely to change positions on these issues, as industry observers and high net worth customers recognized that aircraft, including the flagship Global 8000, has more than 50% US content.
The Bottom Line
Donald Trump’s threat to shut the US market to Bombardier looked like a major escalation of his trade war with Canada, until political realities in Kansas outweighed those at the border. Speaking near Wichita, he stated he didn’t want to harm Bombardier after learning how deeply the company was embedded in the American economy.
The question one must ask is why he didn’t have competent advisors to let him know about Bombardier’s US presence before he threatened the company. The lack of analytical rigor and knowledge about economic impacts demonstrates that political expediency, rather than economic philosophy, is the true driver of his policy choices. That in itself is frightening on a number of levels.
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