The Office of the U.S. Trade Representative (USTR) has announced in a forthcoming Federal Register notice that the United States will increase the tariffs imposed on aircraft imported from the European Union (EU) from 10% to 15% on March 18, 2020. These tariffs resulted from an October 2019 ruling by a World Trade Organization (WTO) arbitrator allowing the United States to take “countermeasures” – implement retaliatory tariffs – against the EU concerning “adverse effects” arising from EU subsidies provided to Airbus (see Trump and Trade Update of October 4, 2019). That ruling determined that the United States could take countermeasures at a level not to exceed $7.49 million annually; this determination was essentially affirmed in December 2019, resulting in the USTR’s decision to enforce U.S. retaliatory rights in this long-running WTO dispute between the United States and the EU over both parties’ subsidies for large civil aircraft manufacturers (see Trump and Trade Update of December 9, 2019).
An annex to the notice provides a full listing of the EU products that were first subject to tariffs in October 2019 and remains substantially the same but with higher duty rates. EU items subject to these additional tariffs on March 18, 2020, include certain new airplanes and other new aircraft. Removed from the October 2019 tariff list is prune juice; added to the list is kitchen chopping or mincing knives.
The USTR indicated the United States “remains open to a negotiated settlement that addresses current and future subsidies to Airbus provided by the EU and certain current and former member States.”