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EU Claims Compliance in WTO Subsidy Case, Calls for End to U.S. Tariffs

Tuesday, July 28, 2020
Sandler, Travis & Rosenberg Trade Report

The European Union is calling on the U.S. to remove its additional tariffs on imports of $7.5 billion worth of EU goods after claiming that Brussels has complied with a World Trade Organization ruling against subsidies provided to aircraft manufacturer Airbus. The U.S. has not yet commented on the EU’s assertion and is currently considering whether to modify the tariffs.

According to an EU press release, the governments of France and Spain have agreed with Airbus to modify the terms of the repayable launch aid they granted for development of the A350 aircraft to reflect market conditions (reportedly, by increasing the interest rates). Because this action “addresses the last remaining measures condemned by the WTO,” the press release said, the EU, as well as France, Germany, and Spain individually, are now “in full compliance” with the WTO ruling.

As a result, EU Trade Commissioner Phil Hogan insisted that the U.S. lift its “unjustified tariffs” immediately. If it does not, the EU said it “will act to exercise its own sanction rights” once the WTO rules on the level of countermeasures it may impose against the U.S. in a parallel case involving U.S. government aid to Boeing. That decision is not expected until this fall.

The Office of the U.S. Trade Representative had made no comment on the EU’s claim as of press time. Instead, USTR is considering whether to modify the list of EU goods currently subject to additional tariffs in this case by removing or adding items or increasing the tariff level to as much as 100 percent. Comments on such changes were due by July 27 and a decision could come in the next few weeks.

For more information on the U.S. tariffs, including how to mitigate their effects, please contact Mark Segrist or Mark Tallo or click here to register for ST&R’s Aug. 6 webinar.

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