The Office of the U.S. Trade Representative (USTR) announced that it will add on January 12, 2021 “certain products of certain EU member States” to the list of products subject to additional duties in the ongoing World Trade Organization (WTO) dispute with the European Union (EU) over subsidies for large civil aircraft.  In October 2019, the United States was authorized by a WTO dispute settlement panel to impose additional duties on approximately $7.5 billion in EU products as a result of the WTO Large Civil Aircraft litigation.  See Update of October 4, 2019 and February 17, 2020.  In a separate but related WTO dispute in September 2020, the EU was authorized to impose its own additional tariffs on approximately $4 billion in U.S. products.  See Update of November 11, 2020.

In implementing these additional tariffs, the USTR in a press release stated, “the EU used trade data from a [benchmark reference] period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the COVID-19 virus”; according to the USTR, this resulted in the EU imposing tariffs “on substantially more products than would have been covered if it had utilized a normal period.”  Despite objections from the USTR, the EU has refused to change its approach.  In response, the USTR announced these additional tariffs “to keep the two actions proportionate to each other” and will change its reference period to the same period used by the EU.

The new EU products subject to the additional tariffs will be “goods of France and Germany, as these countries have provided the greatest level of WTO-inconsistent large civil aircraft subsidies.”  These goods include aircraft manufacturing parts, certain non-sparkling wine, and certain cognac and other grape brandies.  See forthcoming Federal Register notice.  The EU quickly responded by issuing a statement indicating that this action disrupts ongoing negotiations and that it “will engage with the new U.S. administration at the earliest possible moment to continue these [WTO dispute] negotiations and find a lasting solution to the dispute.”