U.K.'s Theresa May 'Bitterly Disappointed' Over US Bombardier Sanctions -- Update

British Prime Minister Theresa May said Wednesday she was "bitterly disappointed" by a U.S. decision to place punitive import duties on a new jetliner made by Canada's Bombardier Inc., putting thousands of jobs at a Northern Ireland factory at risk and as her defense secretary said the ruling could jeopardize Boeing Co. contracts with the U.K.

The preliminary ruling by U.S. trade officials to side with Boeing Co. in a trade spat with its Canadian competitor Bombardier has political ramifications for the British leader whose minority government relies on support from a small Northern Irish party, the Democratic Unionists, to pass key legislation.

"The government will continue to work with the company to protect vital jobs for Northern Ireland," Mrs. May said in a tweet published by her office's verified Twitter account. Bombardier's Northern Ireland factory, which employs 4,200 people, produces 10% of the region's total manufacturing exports.

Aside from creating a headache for Mrs. May as she seeks to pass legislation on her country's withdrawal from the European Union, the decision could also foreshadow complications as the U.K. and the U.S. prepare to expand trade ties once Britain has left.

The dispute underscores the potential for disagreements in industries like aviation, financial services and agriculture based on President Donald Trump's pledge to protect American jobs.

Arlene Foster, head of the Northern Irish Democratic Unionists, said the U.K., Canada and the U.S. must continue to work together to find a solution. "Bombardier jobs vital for Belfast," a message from her Twitter account said. She said her party would use its influence in government to protect the jobs.

U.K. Defense Secretary Michael Fallon, speaking in Belfast, Northern Ireland, said Boeing's challenge could put at risk the company's defense contracts with the U.K.

"This is not the behavior we expect from Boeing and it could indeed jeopardize our future relationship with them," Mr. Fallon said. "Boeing has significant defense contracts with us and still expects to win further contracts. Boeing wants and we want a long-term partnership but that has to be two way."

A spokesman for Boeing U.K. said, "We have heard and understand the concerns from the prime minister and the government about Bombardier workers in Northern Ireland.

"Boeing is committed to the U.K. and values the partnership, which stretches back almost 80 years."

A bilateral trade agreement, which U.S. and U.K. officials have said could be implemented soon after Brexit in early 2019, would allow the U.K. to show that leaving the EU has given it more leeway to expand trade with non-EU countries. The U.S. meanwhile could use any agreement to say bilateral deals, as opposed to multinational ones, help create jobs for Americans.

Hugo Swire, a Conservative lawmaker, said the trade spat "does not bode well for any U.K.-U.S. trade deal." Labour leader Jeremy Corbyn said the U.K. should stand up to the U.S. in the dispute. "If the special relationship means anything, it must mean that we can say to Washington: that way is the wrong way," Mr. Corbyn said at the party's annual conference on Wednesday.

The Northern Ireland factory makes parts for Bombardier's new CSeries jetliner. The U.S. government said it planned to impose a 220% tariff to the cost of the jet after Boeing complained last year that Bombardier was selling it too cheaply and had unfairly benefited from Canadian government support.

Bombardier, based in Montreal, said it strongly disagreed with the trade ruling in favor of Boeing, based in Chicago. "The magnitude of the proposed duty is absurd and divorced from the reality about the financing of a multibillion-dollar aircraft program," Bombardier said. The Canadian government said Boeing's claim is motivated by its desire to stifle competition to its own Boeing 737 passenger jets.

Doug Cameron and

Jacquie McNish

contributed to this article.

Write to Jenny Gross at jenny.gross@wsj.com

(END) Dow Jones Newswires

September 27, 2017 10:47 ET (14:47 GMT)