After winning the largest arbitration award (7.5 billion) in World Trade Organization (WTO) history in its dispute with the European Union (EU) over illegal subsidies to Airbus, the United States (US) will begin applying WTO-approved tariffs on certain EU goods beginning October 18. Although USTR has the authority to apply a 100 percent tariff on affected products, at this time the tariff increases will be limited to 10% on large civil aircrafts and 25% on agricultural and other products. The U.S. has the authority to increase the tariffs at any time, or change the products affected.
On October 14, the United States will have a meeting at the WTO for authorization to take countermeasures against the EU. Pursuant to WTO rules, the WTO will provide this authorization automatically at that meeting, and the EU is not allowed to retaliate against WTO-authorized countermeasures.
The USTR announced that the tariffs will be applied to a range of imports from EU Member States, with the bulk of the tariffs being applied to imports from France, Germany, Spain, and the United Kingdom – the four countries responsible for the illegal subsidies.
The new set of tariffs will affect more than 150 EU imported goods. On April 10, 2019, USTR launched a process under Section 301 of the Trade Act of 1974 to identify EU products to which additional duties may be applied.
The final product list was issued on October 2, 2019 and may be a modified by an upcoming Federal Register Notice. Some products subject to the additional tariff include:
- Single-malt Irish and Scotch whiskies from the UK
- Sweaters, pullovers, sweatshirts, performance outerwear, suits, pajamas, swimwear, blankets, and bed linen from the UK
- Axes, tweezers, pliers, metal cutting shears, pipe cutters, screwdrivers, knives, hand tools, and welding equipment from Germany
- Printed books, lithographs, and pictures from Germany or the UK
- Self-propelled machinery from Germany or the UK
- Liqueurs and cordials from Germany, Ireland, Italy, Spain, or the UK
- Olives and wine from France, Germany, Spain, or the UK
- Certain pork, cheese, yogurt, butter, cherries, peaches, pears, oranges, lemons, clams, mussels, and other agricultural goods from most EU member countries
The U.S. Trade Representative Robert Lighthizer, said, while identifying EU products to which additional duties may be applied to, “[o]ur ultimate goal is to reach an agreement with the E.U. to end all WTO-inconsistent subsidies to large civil aircrafts. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”
Earlier this year, Boeing published a statement about the affects of European subsidies on Airbus, one of its competitors.
Diaz Trade Law has been in the forefront of the U.S./China Trade War and is experienced in navigating mitigation options for the additional Section 301 tariffs. Contact our Customs and International Trade attorneys at 305-456-3830 or firstname.lastname@example.org to help you navigate the additional Section 301 tariffs for impacted EU products.