Trade Compliance Flash: USTR Proposes Additional Tariffs on EU Goods
On July 1, 2019, the Office of the U.S. Trade Representative (USTR) issued a Federal Register Notice where it proposes to impose additional customs duties of up 100 percent on certain imports from the European Union (EU) resulting from a World Trade Organization (WTO) dispute on subsidies for large civil aircraft. The proposed duties would apply to products classified in 89 subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), which account for a trade value of approximately $4 billion. The EU products covered by the proposal include certain pork products, dairy products (particularly cheeses), olives, fruits, coffee (roasted and instant), pasta, mixed condiments and mixed seasonings, Irish, Scotch and other whiskies, chemicals, and metals. The complete list of products is available here.
This is the second round of proposed duties on EU imports pertaining to the same dispute on aircraft subsidies. On April 12, 2019, USTR proposed a first set of duties of up to 100 percent on approximately $21 billion worth of EU imports. That list includes motorcycles, wine, textiles, and other items.
In response, the EU announced its own proposed list of U.S. products subject to additional duties of up to 100 percent on April 17, 2019. Those products include certain food and agricultural products, wine and spirits, tobacco, coal, chemicals, handbags and luggage, plastics, and tractors.
USTR now seeks comments and testimony on the new round of proposed duties, particularly regarding:
- the specific products in the additional list to be subject to increased duties;
- the level of the increase, if any, in the rate of duty; and
- whether increased duties on particular products on the additional list might have an adverse effect upon U.S. stakeholders, including small businesses and consumers.
Persons seeking to submit comments must do so by August 5, 2019, electronically through http://www.regulations.gov. There will also be a public hearing, allowing parties to testify. Requests to appear and testify must be submitted by July 24, 2019.
USTR's course of action may change in response to the ongoing subsidies dispute, most notably if the WTO arbitrator finds that the proposed duties are inconsistent with WTO-authorized countermeasures. Given the uncertainty in the near term, however, companies affected by the proposal should consider deploying a strategy that includes submitting comments (in favor or against the duties) and congressional advocacy. We anticipate that comments and testimony relating to products that can only be sourced from the EU or threaten strategic U.S. industries will be most persuasive.
We will continue to monitor the situation and report when further information is available.
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