On June 24, 2020, the Office of the U.S. Trade Representative (USTR) issued a Federal Register notice concerning certain U.S. actions to enforce its rights in the ongoing World Trade Organization (WTO) dispute with the European Union (EU) over large civil aircraft. The notice seeks public comment on whether certain products of current or former EU member states should be subject to additional duties, whether certain products should be removed from the list of products currently subject to additional duties, and whether a new list of products under USTR consideration should be subject to additional duties. Public comments may be filed with the USTR until July 26, 2020.
This retaliatory trade action is the result of a longstanding and ongoing dispute between the United States and the EU over alleged subsidies provided to Airbus and Boeing. In October 2019, a WTO arbitrator ruled that the United States could implement retaliatory tariffs against the EU concerning “adverse effects” arising from EU subsidies provided to Airbus. The arbitrator determined that the United States could request authorization from the WTO’s Dispute Settlement Body (DSB) (which was subsequently granted) to take countermeasures at a level not to exceed approximately $7.5 billion annually. (See Trump and Trade Updates of October 4, 2019 and December 9, 2019). As a result, the USTR imposed a 10 percent tariff on imported EU aircraft and a 25 percent tariff on certain agricultural and industrial EU goods. In March 2020, the USTR increased the tariffs on EU aircraft to 15 percent (see Trump and Trade Update of February 17, 2020).
Under this June 2020 Federal Register notice, the USTR has announced that it is considering implementing another $3.1 billion in additional retaliatory tariffs on EU aircraft and other products given the EU’s continued non-compliance with the WTO ruling against subsidies provided to Airbus. The notice requests comments as to: (i) whether products listed in Annex I (products currently subject to duties) should be removed from the list or remain on the list, or whether the duty rate should be increased, up to a level of 100 percent; (ii) whether additional duties should be imposed on specific products listed in Annex II (products originally considered for retaliatory tariffs but not currently subject to additional duties); and, (iii) whether additional duties should be imposed on specific products listed in Annex III (a new list of products not previously considered). Any new tariffs could be as high as 100 percent.
The USTR invites interested parties to submit comments and address:
- Whether maintaining or imposing additional duties on a specific product of one or more current or former EU member states would be appropriate to enforce U.S. WTO rights or to obtain the elimination of the EU’s WTO-inconsistent measures, and/or would likely result in the implementation of the DSB recommendations in the Large Civil Aircraft dispute or in achieving a mutually satisfactory solution.
- Whether maintaining or imposing additional duties on specific products of one or more current or former EU member states would cause disproportionate economic harm to U.S. interests, including small or medium-size businesses and consumers.
Public comments must be filed using USTR’s electronic portal at https://comments.ustr.gov/s/. Docket No. USTR-2020-0023 – “Comments Concerning the Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute.” The docket will open on June 26, 2020 and remain open until July 26, 2020. Both public and business confidential information may be filed.