September 27, 2019

U.S. Airbus tariffs to trigger EU duties on U.S. oils and fats?

This Monday (30 September) the U.S. delegation to the World Trade Organization (WTO) will make a statement on the implementation of the so-called Airbus ruling, item 3 on the agenda of WTO’s Dispute Settlement Body confirms. Most probably this will be an announcement that the U.S. will impose punitive import duties on a wide range of products from the EU.

On 12 April 2019 the U.S. Trade Representative (USTR) office already published a provisional list of agricultural products and industrial products from the EU that would face an extra duty. The list covers, among other products, many dairy products and fish products, but also olive oil (no other oils or fats). Last week, however, there were serious signals from Washington sources that the USTR office considers a so-called “carousel approach” i.e. no static list of products but regular changes around the targeted goods. Unlike the previous U.S. duties on steel and aluminum the provisional new package of duties seems to meet the WTO legal requirements, although the EU is convinced that the carousel element breaches WTO rules. Early next week the USTR is expected to announce the duty rates that the U.S. will apply on the targeted list of EU products as of the second half of October.

The European Commission is aiming to avoid a new series of tit-for-tat tariffs through a settlement with the U.S. Should the USTR, however, decide to impose these new tariffs, the EU will most certainly respond. It has already announced that it will use the WTO’s Boeing ruling to retaliate the U.S. Due to procedural reasons the EU has to wait until Spring 2020 before it can actually impose these tariffs on the proposed list of targeted U.S. products, including certain oils and fats (see below). In order to avoid a waiting period of approximately 6-8 months before the EU can give a fierce response to the "Airbus tariffs", it might trigger an old WTO ruling on U.S. tax treatment for Foreign Sales Corporations, so that is can respond much quicker.

Oilseeds:

- Groundnuts (CN 1202.4100 and 1202.4900)

- Sunflower seed (CN 1206.0091 and 1206.0099)

Vegetable and animal fats and oils:

- Soybean oil, refined, for food applications (CN 1507.9090)

- Sunflower oil, crude, for food applications (CN 1512.1191)

- Safflower oil, crude, for food applications (CN 1512.1199)

- Sesame oil, crude and refined, for food applications (CN 1515.5019 and 1515.5099)

- Tung, jojoba and oiticic oils, myrtle and japan wax (CN 1515.9011)

- Tobacco-seed oil, crude and refined, for food applications (CN 1515.9029 and 1515.9039)  

- Non-commodity oils, not specifically mentioned in the customs code, crude and refined, liquid and solid, for food applications (CN 1515.9040, 1515.9051, 1515.9059, 1515.9060, 1515.9091 and 1515.9099).

- Hydrogenated vegetable fats and oils (CN 1516.2010, 1516.2091, 1516.2096 and 1516.2098).

- Animal or vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised (CN 1518.0091).

- Inedible mixtures of vegetable oils and mixtures of animal and vegetable oils, incl. UCOs (CN 1518.0095 and 1518.0099). 

- Fish oil (CN 1504.2010 and 1504.2090)

Other products:

- Fatty alcohols (CN 3823.7000)

- Mayonnaise and sauces (CN 2103.9090) 

 

Last modified: September 27, 2019