Sweaters, anoraks, suits and swimwear imported into the United States from Europe are on a list of products that could be hit by US$11.2bn in additional duties this summer as part of an escalating trade row over aircraft subsidies.
Indeed, the Office of the US Trade Representative (USTR) this week said that the case has been in litigation for 14 years – but that “the time has come for action.”
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The World Trade Organization (WTO) issued an appellate report in May 2018 finding that European Union (EU) subsidies to high-value, twin-aisle Airbus aircraft have caused serious harm to US interests. The report found that billions of dollars in launch aid to the A350 XWB and A380 caused significant lost sales to Boeing 787 and 747 aircraft, as well as lost market share.
Based on that decision, the US requested authority to impose countermeasures worth $11.2bn per year. The EU challenged that figure – and a final decision from a WTO arbitrator is expected this summer.
“The administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures,” US Trade Representative Robert Lighthizer said this week.
“Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted.”
The US has now begun the process under Section 301 of the Trade Act of 1974 to identify products from four EU member states – France, Germany, Spain or the United Kingdom – on which additional duties may be applied.
The government’s full list of items is 13 pages long, but includes 14 categories of woven and knitted clothing (see table below).
Trade law specialist Sandler, Travis & Rosenberg advises importers of goods on this list to “consider taking proactive measures to mitigate the impact of any potential tariff increase, such as working to have their products omitted from the final list or considering alternative sourcing locations.”
USTR is inviting public feedback on the proposed retaliation, including which products should be retained, removed, or added; and the level of tariff increase. Comments are due by 28 May, with USTR also holding a hearing on the issue on 15 May in Washington, DC.
