The first shot
On 8 March 2018, the U.S. adopted a tariff increase on imports of certain steel and aluminium products (at rates of 25% and 10% respectively), effective 23 March 2018 and of an unlimited duration. The effective date of the tariff increase with respect to the EU was deferred to 1 May and subsequently to 1 June 2018. So time is now up. The lobbying by several EU officials and heads of government has proven fruitless. In that regard, the White House press release stated: “The United States was unable to reach satisfactory arrangements, however, with Canada, Mexico, or the European Union, after repeatedly delaying tariffs to allow more time for discussions.”
Will the EU follow and fire the second shot?
The list of U.S. products, including, among others, bourbon whiskey and orange juice, is set. It was consulted with European stakeholders and supported by Member States. The EU notified this envisaged rebalancing to the World Trade Organization (“WTO”) on 18 May 2018. In line with the WTO rules, it could be triggered 30 days later. The Commission will now make a formal decision to proceed with the rebalancing in coordination with Member States. However, if the measures were to be activated, it would only be a matter of time before we hear the third shot: Increased tariffs on EU cars imported into the U.S.
The legal basis for these measures is disputed between the two sides. In any event, it would make no difference for international business. If you have not started contingency planning, you should act now.
Our Trade Compliance expertise
The Competition, EU and Trade team advises national and international companies, as well as public authorities, on all relevant aspects of trade compliance. Our specialists boast longstanding experience inter alia in legal relations with the USA and are excellently networked with key decision-makers in Washington. If you want to know more about how your company will be affected by the new U.S. tariffs or the respective EU rebalancing duties and how you can best prepare for this, contact us.