World Trade Organization Approves U.S. Tariffs on European Union Goods to Counteract Civil Aviation Subsidies
The World Trade Organization (WTO) has approved U.S. duties on $7.5 billion in products from the European Union (EU) after ruling that the EU had unfairly subsidized the production of large civil aircraft, such as those produced by Airbus. The U.S. Trade Representative (USTR) will enforce 10 percent duties on imports of certain aircraft and 25 percent duties on imports of other goods (including agricultural products, apparel, machinery, and other products) beginning October 18, 2019.
The EU plans to impose retaliatory tariffs on $20 billion of U.S. exports in response to subsidies allegedly provided to American plane manufacturer Boeing. However, the EU will have to wait for WTO approval in separate proceedings. The United States and the EU have been involved in WTO dispute settlement proceedings regarding subsidies for large civil aircraft since 2004.
Duties of 10 percent apply to imports of passenger and cargo aircraft from France, Germany, Spain, and the United Kingdom (where the majority of Airbus production is based), provided that they have an unladen weight exceeding 30,000 kg.1
Duties of 25 percent apply to imports of other products from all EU member states (or a subset of these member states, depending on the product category). These products include certain cheeses, pork, coffee, seafood, fruit, dairy spreads, wine, whisky, apparel, bedding, optical instruments, appliances, tools, folding knives, and magnets.
Military aircraft, civil helicopters, and parts or components of civil aircraft are not subject to the duties.2
1 Examples of subject aircraft over 30,000 kg are regional jets capable of seating more than 100 passengers (such as the Airbus A220) and any larger aircraft (including long-haul, wide-body jets). Smaller aircraft, including recreational aircraft, private jets, most turboprop aircraft, and most regional jets with a capacity of fewer than 100 passenger, have an unladen weight of less than 30,000 kg and are excluded.
2 Airbus has production facilities in the United States, that rely on components imported from the EU. Additionally, some EU companies produce certain components of military aircraft for export to the United States.