WTO approves U.S. “Airbus tariffs” on EU products U.S. to impose punitive duties this Friday

This morning the Dispute Settlement Body of the World Trade Organization (WTO) gave its long-awaited approval which allows the U.S. to impose punitive duties on a wide range of products from the EU. This is the last formal step in a lengthy WTO retaliation procedure over EU subsidies for aircraft manufacturer Airbus.

The U.S. will impose these additional import duties on 18 October. This date and the definitive retaliation package were offcially published in the Federal Register last Wednesday (9 October). The U.S. tariff package represents an annual trade value of 7.5 billion U.S. dollar. It covers an additional import duty of 25% on olive oil, but it does not include duties on any other vegetable/animal oils¹ and fats or associated products, such as lecithin, biodiesel and fatty acids from the EU.      

The EU has repeatedly announced that it will respond through tit-for-tat duties on U.S. products. Despite earlier threats, the EU will not trigger an old WTO ruling on U.S. export subsidies, but it will wait for the WTO’s arbitrator judgement in the U.S. Boeing case. This judgement is expected in mid-2020. The provisional EU list in this Boeing case does include countermeasures on a wide range of oils and fats, including UCO's from the U.S.

This morning the EU reiterated in a statement at the WTO that it remains of the view that U.S. punitive duties on EU products would be short-sighted. ,,In the parallel Boeing case, the EU will in some months equally be granted right to impose additional countermeasures. The mutual imposition of countermeasures, however, would only harm global trade and the broader aviation industry.”, according to this EU statement. The EU remains ready to work with the United States on a fair and balanced solution for our respective aircraft industries. 

¹ other than dairy products.

Last modified: October 14, 2019