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As previously reported, since October 18, 2019 the U.S. has imposed additional duties on various European origin goods (including aircraft, certain textiles and wearing apparel, hardware, cheeses, and other agricultural goods) due the ongoing Large Civil Aircraft (LCA) dispute with the European Union (EU).

On December 30, 2020, the U.S. Trade Representative (USTR) announced that in response to certain EU actions involving duties imposed on U.S. goods in related litigation at the World Trade Organization, the U.S. was adding LCA-dispute tariffs to certain products imported from the EU; specifically, certain aircraft manufacturing parts, non-sparkling wines, and cognacs and other grape brandies, but only if the goods are from France or Germany.  All previously announced LCA-dispute tariffs remain in effect.

The additional duties for the newly listed goods will go into effect when entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time January 12, 2021.

The additional goods subject to LCA-dispute tariffs and their corresponding tariff provisions are as follows:

Additional goods (wine and spirits) from France and Germany subject to 25% tariff to duties effective January 12, 2021:

  • Effervescent grape wine, in containers holding 2 liters or less (subject to subheading 2204.21.20).
  • Tokay wine (not carbonated) not over 14% alcohol, in containers not over 2 liters (subject to subheading 2204.21.30).
  • Marsala wine, over 14% vol. alcohol, in containers holding 2 liters or less (subject to subheading 2204.21.60).
  • Grape wine, other than Marsala, not sparkling or effervescent, over 14% vol. alcohol, in containers holding 2 liters or less (subject to subheading 2204.21.80).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding over 2 liters but not over 4 liters (subject to subheading 2204.22.20).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding over 2 liters but not over 4 liters (subject to subheading 2204.22.40).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding over 4 liters but not over 10 liters (subject to subheading 2204.22.60).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding over 4 liters but not over 10 liters (subject to subheading 2204.22.80).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding >10 liters (subject to subheading 2204.29.61).
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding >10 liters (subject to subheading 2204.29.81).
  • Grape must, nesoi, in fermentation or with fermentation arrested otherwise than by addition of alcohol (subject to subheading 2204.30.00).
  • Spirits obtained by distilling grape wine or grape marc (grape brandy), other than Pisco and Singani, in containers each holding not over 4 liters, valued over $38 per proof liter (subject to subheading 2208.20.40**).

 

Additional goods (aircraft parts) from France and Germany subject to an additional 15% duty effective January 12, 2021:

  • Fuselages and fuselage sections, wings and wing assemblies (other than wings having exterior surfaces of carbon composite material), horizontal stabilizers, and vertical stabilizers as defined in U.S. note 21(t), suitable for use solely or principally with new airplanes and other aircraft of an unladen weight over 30,000 kg as described in subheading 9903.89.05 (described in statistical reporting number 8803.30.0030) (subject to subheading 8803.30.00**).

USTR stated in its announcement that the additional LCA-dispute duties were being implemented “in a restrained way” to counter what is believed to be the unfair use of certain trade data.  Specifically, the WTO authorized the U.S. to impose LCA-dispute tariffs on $7.5 billion of EU goods.  Thereafter, the WTO authorized the EU in related litigation to impose tariffs affecting up to $4 billion in U.S. trade.  When calculating the duty impact to achieve the permitted $4 billion, the EU used trade data from a time period (August 2019 – July 2020) during which trade was substantially diminished due to the COVID-19 public health emergency.  As such, when the EU tariffs are applied to trade volumes in a more normal period, the resulting duties exceed the permitted $4 billion.

In response, the U.S. is mirroring the EU’s time period, the result being that current LCA-dispute tariffs applied to goods during that time period result in additional duties substantially less than the $7.5 billion authorized by the WTO.  Consequently, the USTR’s recently announced tariffs on additional goods from France and Germany are designed to raise the LCA-dispute duties on EU goods during the August 2019 – July 2020 time period to approximately $7.5 billion.

If you have any questions or concerns regarding the USTR’s revisions to the list of subject imports from the EU, please contact our International Trade and Supply Chain team.