In the long simmering dispute between the U.S. and the EU over subsidization of aircraft, the U.S. recently announced its intention to impose tariffs on imports from the EU into the U.S. The tariffs are in retaliation and are to counter in amount the level of EU subsidies.

The action is being taken following a finding by the World Trade Organization (WTO) Appellate body that the EU has subsidized the production of high value aircraft, causing harm to U.S. interests. The Office of United States Trade Representative (USTR), the agency that handles international trade disputes, estimates the harm from the EU subsidies as $11 billion in trade each year. The amount is subject to arbitration at the WTO and will likely end up being in the range of $8 billion in allowable retaliation. USTR expects the arbitration decision to be issued this summer after which the U.S. is cleared to impose the retaliation under WTO rules. The potential tariff rate increase has not yet been specified but in these cases has historically been set at 100%.

The Office of the United States Trade Representative (USTR) has released for public comment a preliminary list of products to be covered by additional duties in response to adverse effects caused to the United States by European Union (EU) subsidies. This fourteen-page list includes wine and spirits valued in the range of $6-$8 billion. In addition, the list includes home decoration items, clothing, food and many other items.

If you import these products or use imported products, we encourage you to review the list. If your products are on the list, we recommend that you consider:

  1. Submitting comments to USTR due by May 28th.
  • Testifying at the public hearing in Washington, D.C. on May 15th (request to appear due May 6th).

This hearing and comment period provides you the opportunity to present information and argue for why your product should be removed from the list and not subject to tariffs. USTR has asked for information on:

  • The specific products to be subject to increased duties, including whether products listed in the Annex should be retained or removed, or whether products not currently on the list should be added.
  • The level of the increase, if any, in the rate of duty.
  • The appropriate aggregate level of trade to be covered by additional duties.
  • Whether increased duties on particular products might have an adverse effect upon U.S. stakeholders, including small businesses and consumers.