On October 2, 2019, the Office of the US Trade Representative (USTR) announced that the United States has requested that the WTO schedule a meeting on October 14 to approve a US request for authorization to take countermeasures against the EU in connection with the arbitrator’s decision in the WTO dispute entitled “European Communities and Certain member States — Measures Affecting Trade in Large Civil Aircraft” (DS316). Earlier in the day, the WTO announced that a WTO arbitrator issued its decision finding the level of countermeasures the United States may request is approx. $7.5 Billion. Pursuant to WTO rules, the WTO will provide this authorization automatically at that meeting. The EU is not allowed to retaliate against WTO-authorized countermeasures.
USTR posted on its website a Final Product List for assessment of additional duties. USTR states that the final list of products subject to additional duties is provided for information purposes only. The definitive product coverage will be determined by amendments to the HTSUS that USTR will publish in an upcoming Federal Register notice. The effective date of the additional duties is October 18, 2019.
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. 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 percent on large civil aircraft and 25 percent on certain agricultural and other products. The US has the authority to increase the tariffs at any time, or change the products affected.
USTR will continually re-evaluate these tariffs based on its discussions with the EU.
As specified in the list, which has 15 sections divided by countries of origin and covered products, in certain cases, the product description defines and limits the scope of the additional duties. Otherwise, and unless explicitly stated to the contrary, the product descriptions are provided for informational purposes only, and do not limit the scope of the additional duties. In the product descriptions, the abbreviation “nesoi” means “not elsewhere specified or included”. Any questions regarding the scope of a particular HTS statistical reporting number should be referred to US Customs and Border Protection.
- 10 % additional duties will be assessed on new airplanes and other aircraft (other than military airplanes or other military aircraft), of an unladen weight exceeding 30,000 kg (described in statistical reporting numbers 8802.40.0040, 8802.40.0060 or 8802.40.070) that are products of France, Germany, Spain, or the United Kingdom.
- 24% additional duties will be assessed on the remaining products in 14 other Sections of the list, which are divided by countries of origin and products.
Please see our full Client Alert: WTO Authorizes US Tariffs in Boeing/Airbus Arbitration Decision by Kevin O’Brien, Rod Hunter, Christine Streatfeild and Ross Denton for background, potential US measures and implications for the WTO System and US-EU.
