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By Allison Lampert
MONTREAL, Sept 27 (Reuters) - The 220 percent tariff imposed by the United States on Bombardier Inc’s CSeries jet is an “attack” on Quebec and Canada, the province’s premier said on Wednesday, as the company’s shares and bond prices fell.
The Canadian plane and train maker was hit with the duties on Tuesday, the same day it lost a critical rail deal with Siemens AG after the German company decided to combine its rail division with France’s Alstom SA instead of Bombardier.
Shares in Bombardier opened down 14 percent and were last trading down 10 percent at C$2.04.
“Quebec has been attacked. And Quebec will resist. And Quebec will unite. All together, we will protect our workers,” Quebec Premier Philippe Couillard told reporters at a news conference in Quebec City.
Couillard urged Ottawa, which is hosting the third round of negotiations on the North American Free Trade Agreement, to back Bombardier.
The government of Quebec has taken a $1 billion stake in Bombardier’s CSeries jet. But Couillard said on Wednesday that the company had received “not a cent” in government subsidies.
The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on the CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.
Bombardier said it strongly disagreed with the preliminary decision, calling the magnitude of the proposed U.S. duty “absurd.”
The company, which considered bankruptcy in 2015 and is undertaking a five-year plan to improve its performance and margins, is still grappling with nearly $9 billion in debt.
Bombardier may need to raise more equity to support a capital-intensive business, according to Lorne Steinberg, president of Lorne Steinberg Wealth Management Inc in Montreal.
The lost merger deal with Siemens would have provided capital to support its profitable rail division.
A source familiar with Bombardier’s thinking said the Montreal-based company, with a $30 billion rail backlog, still has the heft to compete.
“Suddenly, the chess board has changed but Bombardier is not small,” said the source. (Reporting by Anna Mehler Paperny; Editing by Jeffrey Benkoe and Meredith Mazzilli)