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U.S. to Hike Tariffs on EU Goods in Aircraft Subsidy Case Beginning Oct. 18

Thursday, October 03, 2019
Sandler, Travis & Rosenberg Trade Report

The U.S. has announced that it will impose additional tariffs of 25 percent on more than 150 goods imported from European Union countries, as well as an additional 10 percent tariff on new aircraft from France, Germany, Spain, and the United Kingdom, effective Oct. 18. The announcement came after a World Trade Organization arbitrator determined that the U.S. may impose up to $7.5 billion annually in countermeasures against the EU due to its failure to fully comply with a previous WTO ruling against subsidies it provided to aircraft manufacturer Airbus.

Among the products that will be subject to the additional 25 percent tariff are the following (see attached for a full list).

- single-malt Irish and Scotch whiskies from the UK

- sweaters, pullovers, sweatshirts, performance outerwear, suits, pajamas, swimwear, blankets, and bed linen from the UK

- axes, tweezers, pliers, metal cutting shears, pipe cutters, screwdrivers, knives, hand tools, and welding equipment from Germany

- printed books, lithographs, and pictures from Germany or the UK

- self-propelled machinery from Germany or the UK

- liqueurs and cordials from Germany, Ireland, Italy, Spain, or the UK

- olives and wine from France, Germany, Spain, or the UK

- certain pork, cheese, yogurt, butter, cherries, peaches, pears, oranges, lemons, clams, mussels, and other agricultural goods from most EU member countries

The Office of the U.S. Trade Representative has previously said that, once implemented, these tariffs will only be lifted “when the EU ends these harmful subsidies.” A Bloomberg article adds that the U.S. is “considering ‘carousel’ retaliation, which would enable the U.S. to regularly shift around the targeted goods.”

The EU is threatening to respond with higher tariffs of its own and is reportedly considering ways to impose them outside its corresponding WTO case against U.S. subsidies to Boeing, where a final decision is not expected until sometime in 2020. Among the options, a Politico article states, are “prior WTO cases where [the EU] has already won the right to impose tariffs on Washington.”

For more information, please contact trade attorney Kristen Smith at (202) 730-4965.

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