US – USTR modifies $7.5 Billion WTO award implementation relating to illegal Airbus subsidies [updated]

On August 12, 2020, the US Trade Representative (USTR) issued a press release stating that, as required by U.S. law, the USTR is issuing a modification to the list of products subject to WTO-authorized additional duties in the United States’ successful WTO challenge to subsidies for large civil aircraft provided by the European Union, France, Germany, Spain, and the United Kingdom. USTR is removing from the tariff list certain products from Greece and the United Kingdom and adding an equivalent amount of trade from France and Germany.  The changes are modest; the amount of products subject to countermeasures will remain unchanged at $7.5 billion and the tariff rates will remain unchanged at 15% for aircraft and 25% for all other products.

“The EU and member states have not taken the actions necessary to come into compliance with WTO decisions,” Ambassador Robert Lighthizer stated.  “The United States, however, is committed to obtaining a long-term resolution to this dispute.  Accordingly, the United States will begin a new process with the EU in an effort to reach an agreement that will remedy the conduct that harmed the U.S. aviation industry and workers and will ensure a level playing field for U.S. companies.”  

The modifications were published on August 18, 2020, in the Federal Register Notice of Modification of Section 301 Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute. The notice [Docket No. USTR-2019-0003] indicated that the modifications (set out in Annex I to the notice) are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight savings time on September 1, 2020.

In order to implement the USTR determination, effective September 1, 2020, subchapter III of chapter 99 of the HTSUS is modified by Annex 1 to this notice. The additional duties provided for in the HTSUS subheadings established by Annex 1 apply in addition to all other applicable duties, fees, exactions, and charges.

Any product listed in Annex 1 to the notice, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by USTR’s determination, and is admitted into a US foreign trade zone on or after 12:01 a.m. eastern daylight savings time on September 1, 2020, only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.

As stated in the February 21, 2020, notice, the USTR has determined that the action may be revised as appropriate immediately upon any imposition of additional duties on US products in connection with the Large Civil Aircraft dispute or with the EU’s WTO challenge to the alleged subsidization of US large civil aircraft.

Annex I provides:

A. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time September 1, 2020, U.S. note 21 to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States is modified as provided herein:

1. U.S. note 21(a) to such subchapter is modified by deleting “9903.89.52” each place that it appears and inserting “9903.89.55” in lieu thereof.

2. U.S. note 21(e) to such subchapter is modified by deleting “0406.90.99”.

3. U.S. note 21(l) to such subchapter is modified by inserting “1905.31.00” in numerical order.

4. U.S. note 21(n) to such subchapter is modified by deleting “1905.31.00”.

5. U.S. note 21(q) to such subchapter is modified by deleting “subheading 8214.90.60” and inserting “subheadings 2007.99.05, 2007.99.10, 2007.99.15, 2007.99.20, 2007.99.25, 2007.99.35, 2007.99.60, or 8214.90.60” in lieu thereof.

6. U.S. note 21 to such subchapter is modified by inserting in alphabetical order:

“(r) Subheading 9903.89.55 and superior text thereto shall apply to all products of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, or the United Kingdom that are classified in subheading 0406.90.99.”

B. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time September 1, 2020, the following new tariff provisions are inserted in numerical sequence in subchapter III of chapter 99, with the material in the following new tariff provisions inserted in the columns entitled “Heading/Subheading”, “Article Description”, and “Rates of Duty 1-General”, respectively:

In addition, there is an Annex 2, which contains a descriptive list of changes from Annex 1, and is for informational purposes only.