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Alerts and Updates

WTO Awards Damages Over Airbus, U.S. Trade Rep Announces EU Tariff Countermeasures

October 4, 2019

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The list of products and countries of origin is extensive and complex. There are 15 specific sections to the final list of products and we urge careful examination of each of these sections.

The World Trade Organization (WTO) announced October 2, 2019, that the United States was entitled to $7.5 billion in damages resulting from the European Union’s subsidization of Airbus. The U.S.-EU Airbus controversy has been before the WTO for many years and the announced arbitration award―the largest in WTO history―follows numerous prior WTO reports and findings that EU subsidies of Airbus were in violation of WTO rules. The WTO decision is final and not subject to appeal.

The United States has requested that the WTO convene a special meeting on October 14, 2019, to approve a request authorizing the United States to impose a so-called countermeasure against the EU. Countermeasures may take the form of additional tariff duties against various products of the EU imported into the United States. For years, Boeing has alleged that EU subsidies have resulted in “significant lost sales” of its large civil aircraft as well as impeding exports of Boeing large aircraft to various countries.

U.S. Trade Representative Robert Lighthizer announced that the U.S. intends to impose additional tariffs on certain products of the EU on Friday, October 18, 2019. The official list will be published in the Federal Register and its coverage will be determined by amendments to the HTSUS as published in the Federal Register.

The list identifies the eight-digit Harmonized Tariff Schedule of the United States subheading and the product description of the products covered.

According to the list made available in advance of Federal Register publication, Section 1 covers products of France, Germany, Spain or the United Kingdom that will be subject to additional duties of 10 percent ad valorem. Of particular note is subheading 8802.40.00, which covers products that fall within the scope of “new airplanes and other aircraft (other than military airplanes or other military aircraft), of an unladen weight exceeding 30,000 kg.”

Numerous items of clothing of UK origin, classified in chapters 61 through 63 of the HTSUS, will be subject to 25 percent additional duties.

Some of the other various products subject to a 25 percent duty include coffee, camera and projector lenses, power tools, pork products, olives and other vegetables, liqueurs and cordials, wine, cheeses and other dairy products. Specific countries of origin include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

The list of products and countries of origin is extensive and complex. There are 15 specific sections to the final list of products and we urge careful examination of each of these sections. It is also urged that you consult with customs officials, legal advisors, customs brokers, etc., regarding the scope of the proposed additional duties. In particularly, we urge careful study of the final product list.

Finally, to the extent that you have products that are subject to the additional ad valorem duties currently in customs bonded warehouse and or Foreign Trade Zones and you are able to make appropriate withdrawals for consumption prior to the effective date of the additional tariffs, you should consider such actions. In addition, for products on the water that will be imported close to the effective date of the new tariffs, consideration should be given to making appropriate entry that will have an official date that precedes the effective date of the additional tariffs.

For More Information

If you would like further information about this Alert, please contact Brian S. Goldstein, any attorney in the International Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.