On October 2, 2019, the World Trade Organization (WTO) authorized the United States to impose tariffs on imports of goods that are products of countries of the European Union with an annual trading volume of up to US$7.5 billion (€6.8 billion). This decision marks the resolution of a 15-year WTO dispute over US claims that Britain, France, Germany and Spain provided illegal subsidies to support the production of various Airbus products.
Based on the WTO decision, the United States Trade Representative (USTR) announced the imposition of tariffs of 10 percent on certain new European airplanes and aircraft and tariffs of 25 percent on other products, such as cheese, olive oil, seafood, wine, whiskey, certain tools and textiles. The additional duties are effective on covered goods that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on October 18, 2019. The USTR has not listed an expiration date for the tariffs, but it has reserved the right to negotiate and reach a settlement with the EU.
Items previously considered by the USTR, but ultimately excluded from the final list, included new helicopters, new civil aircraft parts such as undercarriages and fuselages, certain seafoods such as salmon and crab products, certain fruit products such as grapefruit and strawberry products, certain textile products, and other products.
In response to the new US tariffs, the EU has stated its intention to levy its own tariffs on American goods. In this respect, the EU is awaiting a WTO decision, expected in early 2020, regarding a separate 2005 case in which the EU alleged that Boeing received US$19.1 billion in prohibited subsidies.
DLA Piper attorneys have extensive experience advising clients on strategies to minimize their exposure to additional duties resulting from the new tariffs. If you have questions or would like to discuss your company's situation, please contact Richard Newcomb, Sandra Bell or Martin Schaefermeier.