More Imports from EU Targeted for Potential Tariffs Up to 100 Percent

Nearly a hundred additional products with a trade value of about $4 billion have been added to a list of goods imported from the European Union that could be subject to additional tariffs in a long-running dispute over aircraft subsidies. Importers of these goods should consider taking proactive measures to mitigate the impact of any potential tariff increase, such as working to have their products omitted from the final list or considering alternative sourcing locations.

The World Trade Organization’s Appellate Body ruled in May 2018 that the EU had failed to fully withdraw subsidized financing to Airbus previously found to be inconsistent with WTO rules and harmful to U.S. interests. Based on that decision the U.S. requested authority to impose countermeasures worth $11.2 billion per year. The EU challenged that figure and a final decision from a WTO arbitrator is expected this summer.

In April the Office of the U.S. Trade Representative issued a preliminary list of EU goods to which additional tariffs of up to 100 percent may be applied once the arbitrator determines a final retaliation amount. This preliminary list included 317 tariff lines when imported from any of the 28 EU member states as well as nine tariff lines covering helicopters, aircraft, and aircraft parts when imported from France, Germany, Spain, or the United Kingdom.

USTR has now issued a supplemental list of 89 tariff lines – covering products such as ham, sausage, cheese, olives, fruits, coffee, pasta, whiskey, chemicals, and copper products – that could also be subject to additional tariffs of up to 100 percent.

A public hearing on these additional products will be held Aug. 5 and written comments are also due on that date. USTR is specifically interested in which products should be subject to increased tariffs, the level of any such increase, and whether higher tariffs on particular products might have an adverse effect on U.S. stakeholders, including small businesses and consumers. Requests to appear at the hearing are due by July 24 and post-hearing rebuttal comments are due Aug. 12.

USTR notes that if the WTO arbitrator issues its decision prior to the expiration of the public comment period on this supplemental list, increased tariffs on the products included in the preliminary list may be imposed immediately, with further action possible with respect to products on the supplemental list.

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Source: Sandler, Travis & Rosenberg Trade Report

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