This summer, many shippers are going to see a tariff hike on their goods. There are hundreds of goods being imported from the EU which are on a preliminary list of items that are going to be subject to increased charges starting as early as this coming summer.
What has brought about this increased cost? A long-standing dispute having to do with aircraft subsidies.
Anyone who imports goods on this preliminary list should take into consideration proactive measures to mitigate the financial impact of this increase, such as removing products that are on that final list or searching out alternative sourcing locations.
Currently, the office of the US Trade Representative states that they have been in litigation with the World Trade Organization appellate body which ruled in 2018 that the European Union had yet to complete its withdrawal of subsidized financing to Airbus. This was a requirement as Airbus was found to be inconsistent with rules stipulated by the World Trade Organization and harmful to U.S. interests.
As a direct result of this legal decision, countermeasures were imposed worth 11.2 billion dollars annually, a figure that the European Union challenged and is expected to be arbitrated by the World Trade Organization this summer.
In conjunction with this issue, the United States responded by identifying products from the European Union which will now be subject to tariffs worth up to 100%. The preliminary list has 317 lines of items imported from over 28 member states, included in which are 9 tariff lines covering aircraft, helicopters, and aircraft Parts imported from the United Kingdom, Germany, Spain, and France. Reviewing this preliminary list reveals that the estimated import value of all the items included is approximately 21 billion dollars but of course this list is only reflective upon the amount of trade adversely affected.
The United States has made it clear that this imposition will only be lifted when the subsidies by the European Union are alleviated.
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