On April 12, 2019, the United States Special Trade Representative (USTR) published a preliminary list of Harmonized Tariff Schedule (“HTS”) codes which may be subject to 301 tariff on products manufactured in, and imported from, the European Union (EU) and its member states. The list includes products in the aerospace sector and consumer goods.
The April 12, 2019 list is broken up into two sections:
Section 1applies to a short list of HTS codes and products (in the aerospace sector) from France, Germany, Spain and the United Kingdom only.
Section 2contains a lengthier list of HTS codes and products from any one of the twenty-eight (28) EU Member States. Section 2 covers a wide range of consumer goods, including food and beverage products, handbags, textiles and apparel, and other items.
On July 2, 2019, USTR announced that additional products of the EU were being considered for inclusion in the list of products that may be subject to additional Section 301 tariffs at rates up to 100% ad valorem. The July list of 89 additional tariff subheadings is expected to apply to approximately $4 billion of imports from the EU. The July 2, 2019 list includes products such as cheeses, pasta, meats, olives, fruit, waffles, certain condiments and seasonings, whiskies and certain metals.
The proposed Section 301 tariffs on EU products reflect the United States’ proposed response to subsidies granted by the EU and certain Member States to the EU’s civil aircraft domestic industry. If the USTR ultimately concludes that some, or all, of these 89 tariff provisions should be included in the possible Section 301 action, these tariff provisions would be added to the April 12, 2019 list.
Although the USTR provided opportunities to appear and testify and submit written comments in opposition to the proposal, few comments were submitted and all deadlines for such participation have expired.
The lists of products appear on the following links.
Llink to the Fed. Reg. Notice for the EU List published on April 12, 2019:
Link to the Fed. Reg. Notice for the EU List published on July 5, 2019: https://ustr.gov/sites/default/files/enforcement/301Investigations/Notice_for_Additional_Products.pdf
The issue is currently under review by a World Trade Organization (WTO) Arbitrator who will determine and report the level of countermeasures that the WTO will authorize. The final list of EU products that may be subject to Section 301 duties are expected to take into account the WTO report. U.S. Trade Representative Robert Lighthizer has stated that, “The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures.” The USTR anticipates that the WTO Arbitrator will issues its report by the end of the Summer of 2019.
While settlement discussions have been rumored, it is impossible to predict the outcome of the WTO proceeding and how it will be applied to EU products. EU Producers and U.S. importrs of EU products who have items on these lists should be taking immediate measures to minimize the impact of the potential duties by considering strategies involving tariff classification and valuation and other tariff engineering opportunities.
Any questions regarding the recently discussed above may be directed to Tariff and Trade Advisor, Frank J. Desiderio, Esq. at 212-973-7740 or FDesiderio@gdlsk.com.