A few weeks after the World Trade Organization (WTO) issued a ruling authorizing the European Union (EU) to impose annual tariffs of $4 billion on ‘a list of US products to be established in due course,’ the EU has announced the list of affected products and the tariffs imposed thereon.
The October 13 ruling — the latest development in the longest-running trade dispute in the history of the WTO — allows the EU to respond to the $7.5 billion in tariffs that the WTO last October authorized the United States to impose on jets produced by a large European aircraft manufacturer and other imported European products, the largest arbitration award in WTO history.
EU officials had said they hoped to negotiate a settlement with the United States before levying new tariffs, but on November 7 the EU announced the new tariffs, which took effect November 10. The new tariffs include a 15% tariff on aircraft and 25% tariffs on a wide variety of other specified US-origin products, including frozen fish; fresh cheese; sweet potatoes; fresh fruit; vanilla; nuts; vegetable fats and oils; cocoa and chocolate; tobacco, luggage, handbags and other cases; tractors; gaming equipment and tables for casino games; and exercise equipment.
For prior coverage, see PwC Tax Insight, USTR announces changes to Section 301 tariffs on imports from EU, February 19, 2020.
Many expect that a change of administration in the United States could lead to a greater sense of certainty on trade matters. At the same time, the long-running trade dispute involving aircraft manufacturers suggests that even if there were to be a change of trajectory in trade policy, there remain issues with respect to which tariffs may be deployed, ranging from this aircraft issue to on-going digital tax proposals. The trade landscape requires constant monitoring and proactive engagement to best position company supply chains, avoid disruption, and improve efficiency and productivity.