Aircraft Tariffs from France, Germany, Spain, UK Increase
Aircraft Tariffs from France, Germany, Spain, UK Increase
Aircraft Tariffs Increase from 10% to 15%
The United States Trade Representative released a statement on February 14, 2020 stating, “Under President’s Trump leadership, the United States won the largest award in WTO history on October 2, 2019 when it was authorized to take countermeasures on $7.5 billion in goods after a victory in its unfair trade practices case against the European Union, France, Germany, Spain, and the United Kingdom.”
As a result and after review of public comments, as part of the ongoing Section 301 action on the large civil aircraft dispute aforementioned, the United States Trade Representative has decided to increase tariffs from 10% to 15% on new airplanes and other aircraft from France, Germany, Spain and the United Kingdom. The 10% duties originally went into effect on October 18, 2019. The new 15% ad valorem duty rate will go into effect on March 18, 2020.
Other Products’ Tariffs Remain at 25%
Furthermore, the USTR will also modify the composition of the list of other non-aircraft related products from certain current and former EU member states currently subject to additional 25% duties. At this time, the Trade Representative has decided not to increase the rate of additional duties above the additional 25 percent. However, the USTR has emphasized “the action may be revised as appropriate immediately upon any EU imposition of additional duties on U.S. products in connection with the Large Civil Aircraft dispute or with the EU’s WTO challenge to the alleged subsidization of U.S. large civil aircraft.”
Other Modifications
Effective March 5, 2020, prune juice (HTSUS 2009.89.40) will no longer be subject to the additional 25% tariff.
In addition, effective March 5, 2020, butchers’ or kitchen cleavers, chopping or mincing knives (HTSUS 8214.90.60) from France and Germany, along with telescopic sights for rifles not designed for use with infrared light (HTSUS 9013.10.10) from Germany will be subject to the 25 percent additional tariff.
Background
On April 12, 2019, the Federal Register published an initiation of investigation for the enforcement of U.S. WTO rights in a large civil aircraft dispute between the United States and certain member states of the European Union. Airbus and Boeing are the world’s largest plane-makers and have quarreled over subsidies at the WTO since 2004. The United States requested WTO dispute settlement consultations in 2004 and 2012 in accordance to Section 303 of the Trade Act of 1974. Neither sets of consultations resolved the dispute, and the USTR has still been open to discuss the matters with the EU members it affects. In order to enforce U.S. WTO rights in connection with the Large Civil Aircraft dispute, the Trade Representative initiated a section 301 investigation of the subsidies provided by the EU and certain member States on the manufacture of large civil aircraft.
On October 2, 2019, the WTO Arbitrator issued a report that concluded that the appropriate level of countermeasures in response to the WTO-inconsistent launch aid provided by the EU or certain member States to their large civil aircraft domestic industry is approximately $7.5 billion annually. Subsequently, on October 9, 2019, the U.S. Trade Representative announced a determination that the EU and certain member States have denied U.S. rights under the WTO Agreement and have failed to implement DSB recommendations concerning certain subsidies to the EU large civil aircraft industry. Since then and after public comments in December 2019, the U.S. Trade Representative has been determined to take action.
Summary of Products
We have created a quick unofficial summary of products affected. If an importer brings in any of these items from the countries listed, please view the USTR announcement or the October 9, 2019 Published Federal Register Announcement to read full details on the product description. View Unofficial List. View USTR List.
What to do
There are a number of things you can do. Scarbrough Consulting, Inc. is offering FREE consultations to any company that may be affected by the Section 301 announcements. Please send an email to consulting@scarbrough-intl.com or fill out the form below. Our Global Trade Experts and Licensed Customs brokers are here to help optimize your supply chain and add to your bottom line.
FREE Consulting Request
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Want to Recover Duty paid to CBP?
Duty Drawback is allowed on Section 301 products (but not on Section 232). Ask our team for more information if you are using any Section 301 components to produce items that are re-exported out of the USA. There are other ways to save money on duty. Check out our recorded Duty Savings Opportunities Q&A Session.
