The Office of the U.S. Trade Representative (USTR) has prepared a Federal Register notice seeking public comment on potential enforcement of U.S. retaliatory rights in the long-running World Trade Organization (WTO) dispute between the United States and the European Union (EU) over EU subsidies for large civil aircraft manufacturers. This action stems from an October 2019 WTO arbitrator ruling (see Trump and Trade Update of October 4, 2019) and a second ruling earlier this month (see Trump and Trade Update of December 3, 2019) supporting U.S. retaliation as a result of the WTO Dispute Settlement Body (DSB) ruling that the EU has continued to provide subsidy support to Airbus for its A350 and A380 jets. These subsidies have distorted the large civil aircraft market and placed U.S. aircraft manufacturers at an unfair disadvantage.
The USTR has already imposed a 10 percent tariff on imported EU aircraft and a 25 percent tariff on certain agricultural and industrial EU goods as a result of the October 2019 WTO ruling. The December WTO ruling allows the United States to take further action. In the latest Federal Register notice, USTR has announced that it is considering (1) whether products on the October 2019 list currently subject to additional duties should be removed or remain on the list, and if the additional duties on specific products on this list should be increased up to a level as high as 100 percent, and (2) whether additional duties should be placed on specific products on a second list and the suggested duty rate for such products. The lists of products are included as Annex I and Annex II in the notice. The newly proposed list (i.e., Annex II) is broken down into various sections indicating the EU countries to which any additional duties would be applied and covers far more products than the tariffs already in place (i.e., Annex I).
The USTR invites interested persons to comment on:
- Whether maintaining or imposing additional duties on a specific product of one or more specific EU member states would be appropriate to enforce U.S. WTO rights or to obtain the elimination of the EU’s WTO-inconsistent measures, and/or would be likely to result in the EU implementing the DSB recommendations in the aircraft subsidy dispute or in achieving a mutually satisfactory solution.
- Whether maintaining or imposing additional duties on specific products of one or more specific EU member states would cause disproportionate economic harm to U.S. interests, including small or medium-sized businesses and consumers.
Any public comments on the proposed additional duties must be submitted to the USTR by January 13, 2020. Electronic submissions must be made via the Federal Rulemaking Portal, https://www.regulations.gov, using docket number USTR-2019-0003. A process is available for submitting comments containing business confidential information.