U.S. Updates Tariffs on EU Products in Large Civil Aircraft Dispute

The U.S. Trade Representative has determined to adjust tariffs on certain products imported from the European Union (EU) in order to mirror their Section 301 trade remedy approach based on World Trade Organization (WTO) authorization in the Large Civil Aircraft dispute.

In implementing this approach, the U.S. Trade Representative has determined to revise the action by adding products from certain EU member States to the list of products subject to additional duties, starting January 12, 2021.

Federal Register Notice of Revision of Section 301 Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute

BACKGROUND

In October 2019, The U.S. was authorized to impose additional duties on approximately $7.5 billion in EU products as the result of a Large Civil Aircraft litigation dispute filed with the World Trade Organization.  

The United States used trade data from the prior calendar year to determine the products covered in countermeasures authorized by the WTO.

In September 2020, the EU was authorized to impose tariffs affecting $4 billion in U.S. trade as a result of related WTO litigation.

In implementing its tariffs, however, the EU used trade data from a period in which trade volumes had been drastically reduced due significant impacts on the global economy from the COVID-19 virus.

Additionally, the EU calculated the amount of trade to be covered using EU-27 trade volume, excluding UK trade and unfairly increasing the retaliation for the 52 days in which the UK remained within the EU for tariff purposes.

As a result, Europe imposed tariffs on substantially more products than would have been covered if it had utilized a normal period.  While the U.S. has informed EU officials of the distortive effects of using this selected time period, the EU has refused to adjust trade remedy actions.

ADDITIONAL SECTION 301 LARGE CIVIL AIRCRAFT TARIFFS

In order to keep the two actions proportional to each other, the U.S. has decided to update its reference period to the same period used by the European Union.

However, in order to not escalate the situation, the United States is adjusting the product coverage by less than the full amount that would be justified utilizing the EU’s chosen time period.

The products subject to the additional tariffs include aircraft manufacturing parts from France and Germany, certain non-sparkling wine from France and Germany, and certain cognac and other grape brandies from France and Germany.