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US-EU TRADE UPDATE: US AND EU AGREE TO REDUCE TARIFFS ON CERTAIN PRODUCTS AND THE EU ASKS THE US TO WITHDRAW TARIFFS IN CONNECTION WITH THE LARGE CIVIL AIRCRAFT DISPUTE

On August 21, 2020, the Office of the United States Trade Representative (USTR) issued a Joint Statement with the European Union Trade Commission to announce the first tariff reductions between the US and EU in over 20 years. The tariff reductions will be retroactive to August 1, 2020.  The US will reduce tariff rates by 50% on EU products including certain prepared meals, certain crystal glassware, surface preparations, propellant powders, cigarette lighters and lighter parts, with an average annual trade value of $160 million. In exchange, the EU will eliminate tariffs on imports of U.S. live and frozen lobster products, with a trade value of approximately $111 million in 2017.

Following this announcement, on August 25, 2020 the EU asked the USTR to withdraw the retaliatory Section 301 tariffs imposed in October 2019 on $7.5 billion in imports from the EU in connection with the Large Civil Aircraft dispute. The EU cited the current economic environment and the rescission of subsidies provided to Airbus, as well as Airbus’ amendment of interest rates and risk assessments in its investment contracts with France and Spain to satisfy WTO requirements. Nonetheless, on the same day, U.S. Customs and Border Protection issued CSMS Guidance with instructions regarding the changes to the list of products subject to the Section 301 tariffs that were announced on August 18, 2020 and are effective September 1, 2020.

Please contact our office with any questions or for additional information. We are available to discuss opportunities to obtain refunds on the EU products subject to the tariff cuts and mitigate the effects of the Sec. 301 tariffs.

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