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USTR Proposes Products for Tariff Countermeasures in Response to EU Aircraft Subsidies

Symbol of the Office of the US Trade Representative.April 12, 2019

The Office of the U.S. Trade Representative has published a notice to their web page stating that European Union subsidies to Airbus have caused harm to domestic airline manufacturers and as a result, the U.S. will be seeking to impose additional duties on $11.2 billion in trade each year on goods from the EU. This amount is subject to arbitration at the World Trade Organization as the U.S. brought a challenge against these subsidies in 2004 and a final decision is expected this summer. Once the WTO arbitrator determines the final amount the U.S. will attach addition duties on goods to be determined until such time at the subsidies to Airbus stop.

Excerpts from the USTR Notice

Upon determining that U.S. rights under a trade agreement are being denied... the Trade Representative proposes that appropriate action would include the imposition of additional ad valorem duties of up to 100 percent on products of the EU or certain member States, to be drawn from the preliminary list of HTS numbers in the attached Annex... The final list of products subject to increased duties will take into account the report of the Arbitrator on the appropriate level of countermeasures to be authorized by the WTO.

The Annex to this Notice contains a list of 317 tariff subheadings and 9 Harmonized Tariff Schedule statistical reporting numbers being considered for additional duties. The value of the list is approximately $21 billion in terms of the estimated import trade value for the 2018 calendar year. The products listed in Section 1 of the Annex are being considered for additional duties if they are the product of Germany, France, the United Kingdom, or Spain. The products listed in Section 2 of the Annex are being considered for additional duties if they are the product of any of the 28 member States of the EU.


The USTR is proposing that the U.S. implement additional duties on $11.2 billion in EU imports annually. They have published a list of goods valued at $21 billion per year.  They will not be able to determine a final implementation list until the WTO arbitrator publishes their report after determining the value of the harm to the US market. Once the final value of goods to have additional duties applied is determined the list will be reduced to be commensurate with the adverse effects of the EU subsidies. The products listed in Annex Section 1 which will only be dutiable if they are from Germany, France, UK or Spain are helicopters, aircraft and aircraft parts. Products of Section 2 of the Annex which could be dutiable if they are from any of the EU member countries are a widely diverse group of products from seafood, cheese, fruits, textiles, glassware, tools, and machinery.

The USTR is accepting public comments in regards to specific commodities detailing whether the product should be included or excluded from the list and what effect additional duties may have on U.S. Stakeholders. The USTR is also holding a public hearing regarding this matter on May 15 in Washington DC. Parties wishing to present information at the hearing must submit an application to appear by May 6. Information on how to submit written comments or how to submit a request to appear at the public hearing are detailed on pages 7 - 9 of the USTR notice.  

The full notice is available here.

Source: The Office of the US Trade Representative

 


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