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Delta CEO: 'We will not pay those tariffs' on Bombardier jets

Key Points
  • The U.S. Commerce Department called for duties of close to 300 percent on the jets.
  • Rival Boeing said Canada's Bombardier received government subsidies.
  • Delta agreed to buy at least 75 of Bombardier's C-Series jets.
  • Delta said paying that duty would make the planes unaffordable
Delta CEO: Bombardier innovation, not price is what attracted us

Delta Air Lines said it will not pay a 300 percent tariff the U.S. government recently recommended be placed on Bombardier jets amid a trade dispute between the Canadian manufacturer and its competitor Boeing.

The U.S. Commerce Department sided with Boeing in the dispute in which Boeing accused Bombardier of receiving subsidies for the jet-making program and selling the aircraft to Delta below the cost of production.

"We got a great price," Delta CEO Ed Bastian told CNBC on Wednesday. He declined to disclose how much the airline paid.

Delta had agreed to buy at least 75 of Bombardier's C-Series some 100-seat jets last year.

Bastian called the recommended tariff "absurd" last month and said it would make the planes unaffordable. Delta argued that Boeing no longer makes a comparable product to the Bombardier C-Series.

On an earnings call on Wednesday, Bastian said, "We will not pay those tariffs and that is very clear."

The airline plans to take delivery of the jets, he said, adding that the Commerce Department's ruling is preliminary. The final ruling on the duties is expected in February.

Delta said it is exploring alternatives but declined to give any details.