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New EU Section 301 Tariffs Set to Begin on Friday

On October 3, the Office of the U.S. Trade Representative (USTR) announced that the U.S. had won the largest arbitration award in its dispute with the European Union (EU) over illegal subsidies to airbus.  The World Trade Organization (WTO) ruled that the European aircraft manufacturer had received illegal subsidies from several European counties and that the U.S. can apply special duties on $7.5 billion worth of European goods annually under Section 301.

The USTR has published the final list of affected products, which take effect on October 18.  The additional duties are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on October 18, 2019.  Click here to view the Federal Register Notice, containing the full list of affected countries and products.

In order to determine if a European product is subject to the additional Section 301 duty, it will be necessary to:

  1. Determine the country of origin
  2. Classify the product with the correct HTS #
  3. Review the footnote next to the classification which refers you to Chapter 99*
    • Products provided for in new HTSUS subheading 9903.89.05 will be subject to an additional ad valorem duty of 10 percent
    • Products provided for in new HTSUS subheadings 9903.89.10, 9903.89.13, 9903.89.16, 9903.89.19, 9903.89.22, 9903.89.25, 9903.89.28, 9903.89.31, 9903.89.34, 9903.89.37, 9903.89.40, 9903.89.43, 9903.89.46, and 9903.89.49, will be subject to an additional ad valorem duty of 25 percent
  4. Determine if the combination of country of origin and HTS applies to the Section 301 duty\

*The additional duties provided for in the new HTSUS subheadings will apply in addition to all other applicable duties, fees, exactions, and charges.

For affected goods destined for a foreign trade zone, the notice also states that any product listed in Annex A that is eligible for admission under “domestic status” (as defined in 19 CFR 146.43) must be admitted as “privileged foreign status” (as defined in 19 CFR 146.41) if the product is:

  • Subject to the additional Section 301 duty, AND
  • Admitted to a U.S. foreign trade zone on or after 12:01 a.m. on October 18, 2019

In such cases, the goods will be subject to any ad valorem rates of duty or limitations related to the classification under the applicable HTS subheading upon entry for consumption.

As the WTO also found that Boeing, Airbus’s U.S. rival, received billions of dollars of illegal subsidies, the EU is planning to assess additional duties on U.S. exports in retaliation.  The proposed list includes items such as seafood, fruit, wine, nuts, plastics, tractors, video games and suitcases.  A final decision by the WTO on measures the EU can take in response to Boeing’s subsidies is expected in 2020.

Should you have any questions regarding the impending tariffs or how they may affect your imports, please feel free to contact a member of our Compliance Department at Compliance@oceanair.net.

 

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