President Trump has threatened new tariffs on roughly $4 billion worth of products from the European Union in response to a long running dispute over aircraft subsidies. The Office of the United States Trade Representative (USTR) published a supplemental list of 89 additional products imported from the EU – including olives, cheese, whiskey, pasta, copper products, and other metal products – which could be subject to additional tariffs of up to 100%. To view the supplemental list, click here.
In May 2018, the World Trade Organization’s Appellate Body ruled that the EU had failed to fully withdraw subsidized financing to Airbus which had previously been found to be inconsistent with WTO rules and harmful to U.S. interests. As a result of that decision, the U.S. formally requested authority to impose tariffs on $11.2 billion worth of EU goods per year. The EU challenged that figure, and the WTO arbitrator is expected to issue its final decision on the U.S. sanctions sometime this summer, although it could be postponed until September.
The U.S. and the EU have both threatened to impose tit-for-tat tariffs on planes, tractors, and food after Boeing and its rival Airbus received billions of dollars of subsidies in the world’s largest-ever corporate trade dispute. In April, the Office of the U.S. Trade Representative published a preliminary list of $11 billion worth of EU products that may be subject to the Section 301 duties. The preliminary list included 317 tariffs lines affecting consumer goods such as food and beverages, textiles, apparel, kitchenware, tools, and other items as well as products for the aerospace sector. To view the complete list, click here.
Public Comment Period
The USTR has scheduled a public hearing on August 5 at the U.S. International Trade Commission in Washington, DC. Requests to appear at the hearing are due by July 24, and written comments are due no later than August 5. The USTR is particularly interested in which products should be subject to the increased tariffs, the potential level of duty increase, and whether higher tariffs on particular products could have an adverse effect on U.S. stakeholders, small businesses, and consumers. The USTR notes that if the WTO arbitrator issues the final decision before the expiration of the public comment period for this supplemental list, increased tariffs on the preliminary list maybe imposed immediately with possible further action on the supplemental list.
The move comes just days after a truce was reached in the trade war with China at the G20 summit in Japan. On June 29, President Trump announced that the U.S. will suspend plans to impose additional tariffs of up to 25% on List 4 goods from China.
“Basically, we agreed today that we’re going to continue the negotiation,” Trump told reporters on Saturday. “We’re going to work with China on where we left off to see if we can make a deal.”
In exchange for the U.S. not moving forward with the tariffs on List 4, China has agreed to increase its imports of U.S. agricultural products. The temporary peace does not mean that the trade war between the two countries is over – the additional tariffs imposed by the Trump Administration on $250 billion worth of Chinese imports and China’s retaliatory tariffs on U.S. exports remain in place.
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Sources:
- The Guardian, Donald Trump threatens new tariffs on $4bn of EU products
- STR Trade Report, More Imports from EU Targeted for Potential Tariffs Up to 100 Percent
- American Shipper, Second proposed tariff list released in EU aircraft case
- Supply & Demand Chain Executive, Trade Talks Continue, Trump Holds Off on Additional Tariffs
