Possible retaliatory duties on products from the European Union

Robert B. SilvermanPartner, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

The USTR has published a preliminary list of Harmonized Tariff Schedule (“HTS”) codes on which the USTR may impose future Section 301 duties in connection with products imported from the European Union.  The list includes products in the aerospace sector as well as a wide range of consumer goods, including food and beverage products, handbags, textiles and apparel, and other items. [For more information click here].

The proposed Section 301 tariffs on EU products reflect the United States’ response to subsidies granted by the EU and certain Member States to the EU large civil aircraft domestic industry.[1]  The matter currently is under review by a WTO Arbitrator, who will determine the level of countermeasures to be authorized as a result of the EU’s WTO-inconsistent measures.  The WTO Arbitrator’s determinations will be set forth in a report, which the USTR expects will be issued in the summer of 2019.

Information Important for Importers

The USTR has released a preliminary list of EU products that may be subject to Section 301 duties.  Notably, the EU Proposed 301 List includes two sections. 

Section 1 applies to a brief list of HTS codes and products (in the aerospace sector) of France, Germany, Spain or the United Kingdom only. 

Section 2 applies to a lengthier list of HTS codes and products from any one of the twenty-eight (28) EU Member States.  Section 2 covers a wide range of consumer goods, including food and beverage products, handbags, textiles and apparel, and other items.

The amount of additional duties has not yet been decided by the USTR, which merely proposed that “appropriate action would include the imposition of additional ad valorem duties of up to 100 percent on products of the EU or certain member States, to be drawn from the preliminary list of HTS numbers . . . .”

The complete EU Proposed List can be found below. 

Key Dates, Timeline & Possible Points of Action

The USTR is seeking public comments and will hold a public hearing in connection with the proposed determinations.  The relevant dates are as follows:

  • May 6, 2019 – Due date for submission of requests to appear at the public hearing and summary of testimony
  • May 15, 2019 – Public hearing convened by the Section 301 Committee
  • May 28, 2019 – Due date for submission of written comments, including post-hearing rebuttal comments

The final list of EU products that may be subject to Section 301 duties will take into account the WTO Arbitrator’s report on the appropriate level of countermeasures to be authorized.  U.S. Trade Representative Robert Lighthizer advised, “The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures.”[2]  The USTR anticipates that the WTO Arbitrator will issue its report in the summer of 2019. 

We are available to discuss options for responding to these developments, such as comment submissions to the USTR, classification reviews, valuation strategies, etc. 

Should you have any questions or require additional information, please do not hesitate to contact us at any time.

 

[1] Press Release, Office of the U.S. Trade Representative, USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies (Apr. 8, 2019), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/april/ustr-proposes-products-tariff.

[2] Id.