Earlier this year, the United States won a ruling in a trade case before the World Trade Organization. The case was related to alleged subsidies of Airbus by the European Community. The WTO ruling authorized the United States to impose duties on European imports; and a follow-on ruling dated October 2, 2019 authorized specific duty amounts.
The United States has published a list of products that will be subject to the additional duties. The list is subject to approval by the WTO but that approval is a mere formality. Approval is expected within two weeks.
A copy of the US tariffs list (the “Final Products List”) associated with these punitive tariffs is currently available for information purposes only; however the final list will be published in the Federal Register. This means that the currently-available list, although reasonably reliable, could possibly be changed.
The U.S. list proposes to impose a 10% duty on aircraft imported from France, Germany, Spain, or the United Kingdom. This is limited to aircraft imported under headings
- 8802.40.00.40 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, passenger transport
- 8802.40.00.60 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, cargo transport
- 8802.40.00.70 – Airplanes and other aircraft, of an unladen weight exceeding 15,000 kg, non-military, other (including passenger/cargo combinations)
At present, this list does not appear to include aircraft parts; however this could cause serious burden on US airlines and leasing companies that have already committed to accepting Airbus aircraft or other European aircraft. If this inhibits the economic ability of companies to accept Airbus aircraft in the United States, then it is possible that the expected replacement of certain aircraft in the United States could be delayed.
The US also expects to impose a 25% duty on other named goods. The press has made much of the high-profile categories, like wines and cheeses, but other categories are far more likely to impact the aviation community. This includes:
- German tooling and machinery under 8467.19.10.XX, 8467.19.50.XX, 8568.80.10.XX, 8568.90.10.XX
- UK or German tooling and machinery under 8429.52.10.XX, 8429.52.50.XX, 8467.29.00.XX
- German tools, as follows:
- 8201.40.60-Axes, bill hooks and similar hewing tools (o/than machetes), and base metal parts thereof
- 8203.20.20-Base metal tweezers
- 8203.20.60-Pliers (including cutting pliers but not slip joint pliers), pincers and similar tools
- 8203.30.00-Metal cutting shears and similar tools, and base metal parts thereof
- 8203.40.60-Pipe cutters, bolt cutters, perforating punches and similar tools, (except for those with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium), and base metal parts thereof
- 8205.40.00-Screwdrivers and base metal parts thereof
- 8211.93.00-Knives having other than fixed blades
- 8211.94.50-Base metal blades for knives having other than fixed blades
- 8467.19.10-Tools for working in the hand, pneumatic, other than rotary type, suitable for metal working
- 8467.19.50-Tools for working in the hand, pneumatic, other than rotary type, other than suitable for metal working
- 8468.80.10-Machinery and apparatus, hand-directed or -controlled, used for soldering, brazing or welding, not gas-operated
- 8468.90.10-Parts of hand-directed or -controlled machinery, apparatus and appliances used for soldering, brazing, welding or tempering
These tariffs are expected to be applied as of October 18.