On October 2, 2019, a WTO arbitrator determined the United States could take action on $7.5 billion in annual exports from the European Union in response to subsidies which were deemed illegal from the EU to aircraft manufacturer Airbus SE. The award will be collected on additional duties imposed of 10% on aircraft and 25% on additional products from EU member countries.
According to USTR Robert Lighthizer, “For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies. Accordingly, the United States will begin applying WTO-approved tariffs on certain EU goods beginning October 18. We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers.”
The USTR has published a list of HTS numbers that will have the tariffs applied. A 10% tariff will be applied to Airbus parts and a 25% tariff on the goods listed. These goods include fine French wine, Italian cheese, German coffee and Scotch whisky. Following a meeting on October 14th by the WTO’s Dispute Settlement Body (DSB) where the imposition of duties was green-lighted, tariffs begin on Friday, October 18th.
While retaliation by the EU for these tariffs isn’t allowed, the WTO is still working on a decision that mirrors the Airbus issue; this time with the United States subsidies to Boeing. The Boeing decision is not expected for a few months and the US is disinclined to postpone their tariffs while waiting to hear the decision.
We at Coppersmith will continue to monitor this situation to bring our readers the most up-to-date information available. Remember goods must be arrived, entered, and cleared through Customs before these effective dates to avoid the additional duties.