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EU US Proposed Tariff Countermeasures on Subsidies to Airbus and Boeing

Information on the consultation process by both US and EU authorities regarding the publication of product lists that may attract increased tariffs to goods exported/imported to/from the US. These proposed measures are related to WTO rulings on State subsidies to Airbus and Boeing.

The US and EU have separately referred cases to the WTO regarding alleged State subsidies being provided to aircraft manufacturers, Airbus (EU) and Boeing (US). The WTO has issued findings in both cases with a WTO arbitrator evaluating the claim for damages in respect of both Airbus and Boeing.

Tariff Measures by US re: Airbus

On 15 May 2018, the Appellate Body of the World Trade Organisation found in favour of Boeing – that Airbus were receiving subsidies from the EU including four named Member States (France, Germany, Spain, United Kingdom). Based on that ruling the US requested sanction to impose countermeasures worth $11.2 billion commensurate with the adverse effects caused by the EU subsidies. A WTO arbitrator is currently evaluating the claim and is due to report on the matter in the summer.

Notwithstanding the arbitrator’s report, on 08 April 2019, the US Trade Representative (USTR) released a ‘provisional’ list of European goods worth $11 billion that could be targeted with additional tariffs. In publishing the list the USTR stated: “In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.  Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist”.

The list is split into 2 sections: Section 1 – Tariff Items targeting imports from specific countries (Germany, France, Spain, United Kingdom) and Section 2 – Tariff items from all EU 28 countries.

The USTR subsequently announced that its interagency Section 301 Committee is seeking public comments and will hold a public hearing in the connection with proposed tariff measures over the course of the following schedule; 

  • May 6 Submission of Request to Appear,
  • May 15 Section 301 Committee Public Hearing,
  • May 28 Submission of Written Comments.

Further details can be found here (PDF, 249KB)

Tariff Measures by EU re: Boeing

On 28 March 2019 the WTO Appellate Body found that US subsidies to Boeing continue to cause severe damage to Airbus' market opportunities, notably in the form of lost sales.  This case is also awaiting an arbitrator’s report to the extent of the damages.  On foot of the WTO decision, the European Commission on 12 April 2019, issued a list of product lines that may attract additional tariffs as a countermeasure to US subsidies to Boeing. The list was published for consultation on Wednesday 17 April 2019. The Commission has stated that it has estimated that the adverse effects caused by US subsidies to be in order of €10.16 billion ($12 billion). However, the amount of permitted countermeasures will be determined by a WTO appointed arbitrator with a final list drawn up at a later point.

The list can be accessed here (PDF, 55KB)

The EU Commission are seeking input from private stakeholders who may be affected by the measures proposed and have requested that submissions be made by 31 May 2019.

Further information on the process can be accessed here

Consultation and Engagement

The Department is advising businesses with significant exports/imports to/from the United States to review the tariff lists published by USTR and/or the EU Commission with the view of engaging with them on the matter; outlining the potential impacts the application of additional tariffs would have on their businesses.

DBEI would request that any engagement made with either the USTR and/or EU Commission is shared with the Trade Policy Unit (trade@dbei.gov.ie) of the Department.

Published by Innovation and Investment DivisionOther

Topics: Trade Policy